annual
report
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Table of Contents
01. Letter from the Chairman & Managing Director
02. Exploration Review
03. Summary of Tenements
04. Directors’ Report
Auditor’s Independence Declaration
Consolidated Financial Statements
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4
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22
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36
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
37
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
ASX Additional Information
Corporate Directory
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41
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01.
Letter from the
Chairman
& Managing Director
Dear Fellow Shareholder,
We are pleased to present the 2023 Annual Report for
Encounter Resources Ltd (“Encounter”). This year
Encounter’s committed approach to exploration has shone a
light on the West Arunta which is emerging as a major, new
critical minerals province in Western Australia.
In addition to the West Arunta, Encounter continues to
progress a large portfolio of 100% owned copper and critical
mineral projects in Australia’s most exciting mineral regions.
Complementing this, Encounter has numerous large scale
copper projects being advanced and funded through farm-
in agreements with leading miners: BHP Group, IGO and
South32.
Copper, zinc, rare earths and niobium are all crucial
commodities required for electrification and the
decarbonisation of global energy infrastructure,
supercharging their importance.
This requires deposits to be discovered and for new mines
to be developed to meet burgeoning demand. All against
a background of constrained supply and lack of discovery
success. As such, it is an incredible time to be blazing a path
into new mineral districts in central Australia.
Encounter believes that major discoveries are likely to
occur in these regions by implementing new technologies
and methods. This belief has driven the construction of
Encounter’s project portfolio and our approach to exploration.
Encounter’s primary focus is the 100% owned Aileron project
in the West Arunta, now confirmed as a large scale and highly
prospective critical minerals province.
Early in 2023, Encounter completed a project wide Falcon
gravity survey at Aileron. This survey was one of the largest
privately funded, belt scale gravity surveys ever completed in
Australia. It was a major undertaking for a junior explorer and
provided fundamental data to target IOCG and carbonatite-
hosted critical mineral deposits. The survey revealed
numerous targets that are interpreted as potential alkaline
intrusions which are highly prospective for carbonatite-hosted
critical minerals and base metals deposits.
To date we have already identified niobium-rare earth
mineralised carbonatites at the three targets, Hoschke, Crean
and Hurley. It is still early days and our success rate speaks to
our targeting methods and bodes well for future drill programs
at Aileron.
Aileron is not just highly prospective for niobium and rare
earths, the region has shallow cover and exhibits considerable
IOCG copper potential. Aileron has a comparable aged host
sequence and hydrothermal events to the world-class IOCG
copper deposits within South Australia’s Gawler Craton
(including Olympic Dam and Prominent Hill). Unlike the
hundreds of metres of cover at the Gawler Craton, Aileron is
under shallow cover and surface geochemistry and shallow
drilling have a credible chance of identifying near surface
mineralisation.
In addition to its 100% owned projects, Encounter has a
portfolio of exciting copper projects in Western Australia
and the Northern Territory which are advancing via farm-
in agreements with some of Australia’s largest mining
companies (BHP Group, IGO and South32). Encounter is
delighted to be working with high quality partners and their
accomplished exploration teams.
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Letter from the Chairman and Managing Director
01.
With an extensive portfolio of 100% owned and farm-in
projects, Encounter remains one of the most dedicated and
active mineral exploration companies in Australia. We are
committed to generating significant, long-term value for our
shareholders through leading edge exploration for major
copper and critical mineral deposits in Australia.
In closing, we would like to thank our local communities,
employees, joint venture partners and suppliers. We also
would take this opportunity to thank our fellow shareholders
for your ongoing support.
Yours sincerely
Paul Chapman
Chairman
Will Robinson
Managing Director
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02.
Exploration
Review
Exploring for the next copper and critical
minerals discoveries
100% owned projects in Australia’s most exciting mineral provinces
Aileron Critical Minerals Project –
West Arunta – WA (100% ENR)
• An 8,000 line km airborne magnetic-radiometric survey
was completed in November 2022 which identified new
targets and upgraded existing targets
• A project-wide Falcon airborne gravity survey defined
significant gravity anomalies interpreted as potential
intrusive bodies or alteration signatures prospective for
IOCG mineralisation
• A 6 hole diamond drilling program was completed at
Caird, Crean and Hoschke in May-June 2023
• The first diamond drill program at Crean discovered a
significant niobium-REE carbonatite intrusive complex
Junction Lithium Project – NT
(100% ENR)
• Highly anomalous rock chip assays for lithium and
other critical minerals from the pegmatites sampled in
December 2022
• Assays confirmed LCT (lithium-caesium-tantalum)
pegmatites, comparable to the host pegmatites of the
Finniss lithium deposits in the Pine Creek region
Irwin REE Projects – WA
(100% ENR)
• Significant rare earth element (“REE”) potential at the new
Irwin Project in the Laverton region of WA
• A 10,000m RC drill program commenced August 2023 to
extend the niobium-REE mineralisation at Crean as well as
drill testing a suite of new, high-quality targets
• Targets are centred on a structural corridor that extends
north-west from the Mt Weld carbonatite located 100km
SE, owned by Lynas Rare Earths Ltd (ASX:LYC)
•
In September 2023 RC drilling intersected a new, large
scale niobium-REE carbonatite at the Hurley target located
3km east of the Crean carbonatite complex
Sandover Copper Project – NT
(100% ENR)
• Major regional gravity survey completed in late 2022
which was co-funded by the Northern Territory Geological
Survey (“NTGS”)
• Encounter was awarded a co-funded drilling grant by the
NT Government (up to $200,000) to complete diamond
drilling at Sandover. This program is scheduled to
commence in October-November 2023
Lamil Copper-Gold Project –
Paterson Province – WA (100% ENR)
• High-grade copper-gold reefs, up to 6.5% copper and
21.5g/t gold, intersected in the September 2022 drill
program
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Exploration Review02. Major copper exploration drive funded through farm-ins with leading miners
Elliott Copper Project – NT
(BHP $25m farm-in)
• Diamond drill program completed in November 2022
(2 holes – 1,655m)
• 2022 diamond drilling intersected a potential “first
reductant” horizon defined by anomalism in redox-
sensitive elements such as copper, vanadium and
molybdenum
Jessica and Carrara Copper-Zinc
Projects – NT (South32 $15m & $10m
farm-ins)
• Reprocessing of seismic lines defined new drill targets at
Jessica and Carrara
− 4 diamond drill holes (3,500m) at Jessica and 3
diamond drill holes (3,000m) at Carrara planned for the
2023 field season
− The first drilling at Jessica intersected copper
mineralisation in an IOCG setting at Zeta
Yeneena Copper Project –
Paterson Province - WA (IGO $15m
farm-in)
• 2022 diamond drill program completed, 6 diamond holes
(3,988m)
• 2,950 line km airborne magnetic survey completed
January 2023
• 5 diamond drill holes (2,900m) and 26 aircore holes
(2,600m) to be completed between July and
September 2023
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Exploration Review02. 100% owned projects in Australia’s most
exciting provinces
Aileron Copper-Critical Minerals Project – West Arunta, WA
(100% ENR)
The 100% owned Aileron project covers 1,765km2 and is
located in the West Arunta region of WA, ~600km west of
Alice Springs. Encounter completed large gravity, magnetic
and radiometric surveys at Aileron which defined three initial
drill targets. In May-June 2023, a diamond drilling program at
Caird, Crean and Hoschke was completed.
The first diamond hole (EAL001) at Hoschke intersected
a niobium-REE mineralised carbonatite dyke within the
Elephant Island Fault corridor which intersected 16m at 0.6%
Nb2O5 & 0.2% TREO from 350m (ASX release 28 June 2023).
Two additional diamond holes at Crean (EAL007 & EAL008)
were added to the program following observations of the core
from EAL001.
Assays from the diamond drill hole EAL007 returned:
• 282m @ 0.54% Nb2O5 & 0.17% TREO from 64m to end of
hole including:
− 19m @ 1.0% Nb2O5 & 0.2% TREO from 65m
− 48m @ 1.0% Nb2O5 & 0.2% TREO from 181.5m
including:
− 4.9m @ 2.2% Nb2O5 & 0.2% TREO from 209m (ASX
release 6 September 2023)
EAL008 is located 1.5km west of EAL007 and returned:
• 68.8m @ 0.8% Nb2O5 & 0.5% TREO from 55m including:
− 4m @ 3.8% Nb2O5 & 1.9% TREO from 55m (ASX release
7 August 2023)
In September 2023 RC drilling intersected a new, large scale
niobium-REE carbonatite at Hurley. Hurley is a coincident
magnetic-gravity anomaly located 3km east of the Crean
carbonatite complex. Four RC holes drilled at Hurley (EAL029,
EAL030, EAL031 and EAL034) intersected niobium-REE
anomalous carbonatite to end of hole.
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Exploration Review02. Figure 1 – Aileron diamond drill plan showing 3 holes (EAL001, EAL008 and EAL007) that intersected carbonatites over 3.5km of strike
Falcon Gravity Survey
In May 2023 a project-wide Falcon airborne gravity survey
defined significant gravity anomalies in the eastern part of
Aileron that have been prioritised for exploration:
• Wordie is a circular density feature about 6km in diameter
with significant internal complexity. It is interpreted as a
potential alkaline/carbonatite intrusive body.
• Mawson and Perce are discrete, high amplitude (~6
mGal) anomalies that could outline alkaline/carbonatite
intrusions or hematite alteration prospective for IOCG
mineralisation.
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Figure 2 – Aileron Falcon gravity survey has highlighted numerous high priority targets (dotted outlines)
Exploration Review02. Aileron Copper-Critical Minerals Project – West Arunta, WA
(100% ENR) (Continued)
Next Steps
• A 10,000m RC drilling commenced in August 2023. This
program includes:
− drilling of the Hurley and Wild targets located east of
Crean; and
− drilling to extend the shallow, high-grade niobium-REE
− drilling at the Green target north of WA1 Resources’
mineralisation at Crean;
Luni niobium-REE discovery
Figure 3 – Aileron diamond drill locations (black dots) over residual gravity with planned RC drill program targets (dotted outlines)
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Exploration Review02. Sandover Copper Project – NT (100% ENR)
Sandover is located 170km north of Alice Springs and covers
a major structural corridor on the southern margin of the
Georgina Basin.
This provides encouraging evidence that processes capable
of forming high-grade copper mineralisation are present in the
basin.
Field mapping and surface sampling has confirmed the
presence of an outcropping red-bed sandstone sequence
with multiple narrow but strike extensive grey shale units
containing copper oxide mineralization (malachite) (Figure 4).
Inspection of historical drill holes (drilled in 1968, 1971 and
1994) completed at Sandover confirmed key geological
units and processes to enable the formation of sediment
hosted copper deposits. Significantly, narrow zones of copper
sulphide minerals, including bornite, have been identified in
historical drill core (ASX announcement 9 June 2022).
An NTGS co-funded gravity survey was completed at
Sandover in 2022. This survey covered the western part of the
large sub-basin identified at Sandover. This fundamental new
dataset is being integrated with existing datasets to assist with
target definition.
In June 2023, Encounter was awarded a co-funded drilling
grant by the NT Government (up to $200,000) to complete
diamond drilling at Sandover. This drill program is scheduled
to commence in October-November 2023.
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Figure 4 – Geological map showing cupiferous outcrop, drillhole locations and surface sampling (compiled from company reports and Haines 2004).
Source: NTGS Geology and Mineral Resources of the Northern Territory. Special Publication 5. Compiled by Ahmad, M. and Munson, T.J., June 2013.
Areas 1-4 sampled by Encounter in October 2021, Area 5-7 sampled in April 2022.
Exploration Review02. Junction Lithium Project – NT (100% ENR)
Junction sits within the North Arunta Pegmatite Province
which was first identified in a report by the Northern
Territory Geological Survey (“NTGS”) in 2005 (Figure 5).
The NTGS interprets that the pegmatites in the region are
LCT pegmatites similar to the host pegmatites of the lithium
deposits at Greenbushes in WA and the Finniss deposit in the
Pine Creek pegmatite province in the NT.
In December 2022, initial field reconnaissance was
completed at Crawford to investigate a series of outcropping
and sub-cropping pegmatites.
The outcrops were rock chip sampled over 4km of strike
proximal to the margin of a large, interpreted granite body.
Outcropping pegmatites and fractionated granites were
sampled along the 4km trend which returned highly
anomalous lithium and other critical mineral assays.
Systematic soil geochemical sampling of the LCT pegmatite
prospective corridor will be completed following completion
of land access agreements.
Figure 5 – North Arunta Pegmatite Province – Junction Lithium Project location highlighting ENR’s Crawford and Nelson targets. Also shown are
nearby LCT pegmatite occurrences sourced from company reports and NTGS Report 16 Tin-tantalum pegmatite mineralisation of the Northern
Territory (Frater 2005).
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Exploration Review02. Irwin REE Projects – WA (100% ENR)
In 2009, Encounter completed an aircore drilling program
near Lake Irwin located north-west of Laverton that
intersected anomalous REE in a felsic intrusion below
a sequence of transported sands and clays. With this
knowledge, an evaluation of regional geophysics was
initiated and highlighted a series of anomalies that are
interpreted to be intrusions.
In late 2022, Encounter applied for 4 tenements (>800 sq
kms) to cover the REE targets identified at Irwin (Figure 6)
(ASX announcement 13 April 2023).
On ground exploration is expected to commence later in
2023.
Figure 6 – RTP magnetic survey image highlighting the Irwin targets. Encounter tenements & historical aircore drillholes are shown
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Exploration Review02. Lamil Copper-Gold Project - Paterson Province – WA (100% ENR)
The 100%-owned Lamil Project covers an area of ~61km2 and
is located 25km northwest of the major copper-gold mine at
Telfer, owned by Newcrest Mining Ltd (ASX:NCM).
siltstones and quartzites. The mineralisation is hosted in
metasedimentary rocks of the Proterozoic Lamil group which
also host the Telfer, Havieron and Winu copper-gold deposits.
The Dune prospect is located in the northwest of Lamil and
consists of a laterally extensive copper-gold system, outlined
by broad spaced RC drilling over 1km of strike (Figure 7).
Drilling at Dune has intersected multiple, stacked, copper-
gold reefs within a thick prospective package of interbedded
Follow up exploration will be designed to test for extensions
of the high-grade copper-gold reefs and the up-dip projection
of the epithermal copper-silver bearing vein previously
intersected.
Figure 7 – Dune prospect plan showing copper-gold mineralisation extending over 1km of strike (ASX announcement 28 December 2022)
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Exploration Review02. Figure 8 – Encounter copper and lithium projects in the Northern Territory – Project Location Plan
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Exploration Review02. Major copper exploration drive funded
through farm-ins
Jessica Copper Project – NT
(South32 $15m Farm-in)
Jessica is being explored in partnership with South32 under a
Farm-In Agreement. Together with South32, reprocessing of
seismic data that extends through Jessica was completed by
HiSeis, to provide greater detail of the geology and structure
in the upper 1,000m. A 2km spaced gravity survey was also
completed with 1km spaced gravity infill data collected over a
series of high priority magnetic targets.
The seismic reprocessing and gravity surveys have identified
a series of targets for drill testing including the Zeta IOCG
target (“Zeta”). Zeta is a significant and discrete gravity
feature coincident with a prominent magnetic feature on the
margin of a large interpreted intrusive body (Figures 10 &
11). In addition, there is a discrete seismic reflector at depth
immediately underlying Zeta (Figure 12) (ASX announcement
28 October 2022).
A target generation process highlighted additional copper
prospects adjacent to Jessica and the Farm-in Agreement
tenure was expanded by ~60% in May 2023 and now covers
~10,300km2 along key structural corridors east of Tennant
Creek prospective for sediment-hosted and IOCG-style copper.
Diamond drilling commenced in July 2023 at Jessica with four
diamond drill holes (3,500m) planned to test targets identified
through seismic reprocessing and gravity surveys.
In September 2023, the first two drill holes completed at
Zeta, drilled 1.3km apart, intersected a number of key IOCG
indicators including:
• Chalcopyrite/bornite in thin quartz-carbonate veins;
•
• Bimodal felsic volcanic-basalt sequences (indicating a
Intense and pervasive red rock hematite alteration; and
major, long lived structure)
Geophysical techniques are being evaluated to vector into the
best parts of the mineral system at Zeta.
Figure 9 – Jessica and Carrara project location plan over Bouguer gravity
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Exploration Review02. Figures 10 & 11 – Jessica Project – Zeta IOCG target. Gravity (1VD) (left) and Magnetics (RTP) (right), location of GA seismic lines shown in red
Figure 12 - Jessica Project – Zeta IOCG Target – Seismic cross section
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Exploration Review02. 02.
Exploration Review
Carrara Copper-Zinc Project –
(South32 $10m Farm-in)
Yeneena Copper Project –
Paterson Province WA
(IGO $15m Farm-in)
Yeneena comprises a major land position covering >1,450km2
in the highly prospective Paterson Province, targeting copper-
cobalt mineralisation. IGO can sole fund $15m in exploration
expenditure over a maximum of seven years to earn a 70%
interest in Yeneena.
Exploration at Yeneena is focused on discovering high-value
sediment-hosted copper deposits. The strategy implemented
by IGO involves the collection of belt-scale, high-quality
primary datasets, with cutting-edge techniques used to
acquire geological, geochemical and geophysical data. All
data is integrated and interpreted into 3D belt-scale and
supporting camp-scale models.
Drilling to be completed by IGO during the September 2023
quarter is planned to include 5 diamond drill holes (2,900m)
and 26 aircore holes (2,600m).
Carrara was secured following the release of the South
Nicholson Seismic Survey, a foundational dataset acquired
as part of the Geoscience Australia Exploring for the Future
Program. A key finding of this survey is the correlation of
prospective stratigraphic units from the Isa Superbasin into
the Carrara Sub-basin that extends the Mount Isa Province to
the west.
Carrara is located at an interpreted structural offset of
the western margin of the Carrara Sub-basin where the
prospective Isa Superbasin units are modelled closer to
surface.
The giant Century Zinc Mine is located on the eastern margin
of the Carrara Sub-basin, and there is a clear correlation of the
Century mine stratigraphy across the basin in the Geoscience
Australia seismic data.
Reprocessing of seismic lines that extend through Carrara,
has been completed in partnership with South32. This has
provided far greater detail of the geology and structure in the
upper 1,000m resulting in the definition of multiple targets at
key structural locations along the western margin of the sub-
basin.
Three diamond drill holes (3,000m) are planned to
commence at Carrara following completion of the diamond
drill program at Jessica.
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Exploration Review
02.
Elliott Copper Project – NT
(BHP $25m Farm-in)
The Elliott copper project (”Elliott”) covers more than
7,200km2 and is being explored together with BHP, where
BHP has the right to earn up to a 75% interest in Elliott by sole
funding up to $25m of expenditure within 10 years.
Elliott is located at a major structural intersection on the
southwestern margin of the Beetaloo Basin which is part of
the Greater McArthur Superbasin that hosts a giant sediment-
hosted base-metal deposit at McArthur River.
The Superbasin contains thick, petroleum-bearing, reduced
sediments within the Roper Group which are an ideal trap
sequence and the major structures bounding the Superbasin
are considered ideal structural fluid pathways for major
sediment-hosted copper deposits. The project encompasses
key conceptual criteria for the formation of sediment-hosted
copper and the target sequence is undercover and untested.
A 2 hole diamond drill program was completed in November
2022 (1,655m). In drillhole ELT001, the middle and lower
members of Velkerri Formation (within the Roper Group)
were identified containing multiple zones of organic and
pyritic rich black shales. Importantly, from 516m to 538m an
anomalously organic and pyrite rich shale was intersected
that is interpreted as the Amungee Member of the Velkerri
Formation.
Encouragingly, this interpreted intersection of the Amungee
Member is distinctly anomalous in copper. Importantly, there
is a major discontinuity in levels of redox-sensitive elements
such as vanadium and molybdenum across this horizon,
indicating that it may have behaved as the “first reductant”
during evolution of the basin (i.e. the first reduced horizon
that overlies an oxidised potential source sequence). Such
“first reductant” horizons are a key target for sediment-hosted
copper deposits.
2023 ANNUAL REPORT
17
Key risks
The Company operates in the mineral exploration industry in
Australia and as such is exposed to and manages various risks
typical of operating in that sector pursuant to the principles
included in the Company’s Audit and Risk Management
Committee Charter. A summary of the key risks that the
Company is exposed to are as follows:
Future capital requirements
In relation to tenements which the Company has an interest
in or will in the future acquire such an interest, there are
areas over which legitimate common law native title rights
of Aboriginal Australians exist. Where native title rights exist,
the ability to gain access to tenements (through obtaining
consent of any relevant landowner), or to progress from the
exploration phase to the development and mining phases of
operations may be adversely affected.
The Company requires financial resources in order to carry
out its exploration activities.
Environmental risks
The Company’s operations and projects are subject to various
health and environmental laws and regulations of jurisdictions
in which it has interests. The Company conducts its activities
to a high standard in compliance with environmental laws.
Sovereign risk
The Company is subject to political, social, economic and
other uncertainties including, but not limited to, changes
in policies or the personnel administering them, foreign
exchange restrictions, changes of law affecting foreign
ownership, currency fluctuations, royalties and tax increases.
Failure to obtain appropriate financing on a timely basis could
cause the Company to have an impaired ability to expend
the capital necessary to undertake or complete drilling
programs, forfeit its interests in certain properties, and reduce
or terminate its operations entirely. If the Company raises
additional funds through the issue of equity securities, this
may result in dilution to the existing shareholders and/or a
change of control at the Company.
Exploration and evaluation risks
Mineral exploration and development is inherently highly
speculative and involves a significant degree of risk. There
is no guarantee that it will be economic to extract these
resources or that there will be commercial opportunities
available to monetise these resources.
Title, tenure and land access risks
The rights to mineral tenements carry with them various
obligations which the Company is required to comply with in
order to ensure the continued good standing of the tenement.
Failure to meet these requirements could prejudice the right
to maintain title to a given area and result in government or
third-party action to forfeit a tenement or tenements.
Mining and exploration tenements are subject to periodic
renewal. The renewal of the term of granted tenements is
subject to compliance with the applicable mining legislation
and regulations and the discretion of the relevant mining
authority.
The Company confirms that it is not aware of any new information or data that materially affects the information in the relevant ASX releases and the form and context of
the announcement has not materially changed. The Company confirms that the form and context in which the Competent Persons findings are presented have not been
materially modified from the original market announcements.
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Exploration Review02. 03.
Summary
of Tenements
Lease Name
Project Name
Area km2 Managing Company
Lease
E80/5169
E80/5469
E80/5470
E80/5522
Aileron
Aileron
Aileron
Aileron
ELA80/5934
Aileron North
ELA80/5935
Aileron North
ELA80/5936
Aileron North
ELA80/5937
Aileron North
Lamil
West Arunta
West Arunta
West Arunta
West Arunta
West Arunta
West Arunta
West Arunta
West Arunta
Paterson
187.6
Encounter Aileron Pty Ltd
534.3
Encounter Aileron Pty Ltd
613.9
Encounter Aileron Pty Ltd
429.2
Encounter Aileron Pty Ltd
636.85
Encounter Aileron Pty Ltd
635.68
Encounter Aileron Pty Ltd
635.74
Encounter Aileron Pty Ltd
635.92
Encounter Aileron Pty Ltd
60.7
Encounter Paterson Pty Ltd
Encounter
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
E45/4613
E45/3446
P45/2750
P45/2751
P45/2752
P45/3032
E30/517
E30/527
E38/3794
E37/1518
E38/3811
ELA38/3797
ELA37/1522
East Thomson’s Dome
Paterson
6
Encounter Paterson Pty Ltd
East Thomson’s Dome
Paterson
198 HA
Encounter Paterson Pty Ltd
100% **
East Thomson’s Dome
Paterson
177 HA
Encounter Paterson Pty Ltd
100% **
East Thomson’s Dome
Paterson
199 HA
Encounter Paterson Pty Ltd
100% **
East Thomson’s Dome
Paterson
113.80 HA
Encounter Paterson Pty Ltd
100% **
Rani
Rani
Irwin
Irwin
Irwin
Irwin
Irwin
Yilgarn
Yilgarn
Yilgarn
Yilgarn
Yilgarn
Yilgarn
Yilgarn
208.8
Baudin Resources Pty Ltd
6
Baudin Resources Pty Ltd
211.75
Encounter Yeneena Pty Ltd
212.13
Encounter Yeneena Pty Ltd
211.56
Encounter Yeneena Pty Ltd
211.63
Encounter Yeneena Pty Ltd
21.22
Encounter Yeneena Pty Ltd
100%
100%
100%
100%
100%
100%
100%
18 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
19
Summary of Tenements03. 03.
Summary of Tenements
Lease
Lease Name
Project Name
Area km2 Managing Company
Encounter Interest
EL32374
Sandover
Northern Territory
795.4 Baudin Resources Pty Ltd
EL32421
Sandover
Northern Territory
792.67 Baudin Resources Pty Ltd
EL32694
Sandover
Northern Territory
792.71 Baudin Resources Pty Ltd
EL32695
Sandover
Northern Territory
787.39 Baudin Resources Pty Ltd
EL32696
Sandover
Northern Territory
763.6 Baudin Resources Pty Ltd
EL33060
Sandover
Northern Territory
740.11 Baudin Resources Pty Ltd
EL33065
Sandover
Northern Territory
665.33 Baudin Resources Pty Ltd
EL32478
Brunchilly
Northern Territory
798.52 Baudin Resources Pty Ltd
EL32721
Broadmere
Northern Territory
816.73 Baudin Resources Pty Ltd
EL32723
Dunmarra
Northern Territory
823.05 Baudin Resources Pty Ltd
EL32727
Maryfield
Northern Territory
795.65 Baudin Resources Pty Ltd
EL32728
Maryfield
Northern Territory
826.95 Baudin Resources Pty Ltd
ELA32937
Broadmere
Northern Territory
825.11 Baudin Resources Pty Ltd
ELA32938
Broadmere
Northern Territory
744.04 Baudin Resources Pty Ltd
ELA32724 Dunmarra
Northern Territory
821.54 Baudin Resources Pty Ltd
ELA33048
Sandover
Northern Territory
789.2 Baudin Resources Pty Ltd
ELA33330
Jessica North Northern Territory
805.77 Baudin Resources Pty Ltd
ELA33331
Jessica North Northern Territory
802.06 Baudin Resources Pty Ltd
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
ELA33412
Jessica West
Northern Territory
778.62 Baudin Resources Pty Ltd 100% South32 earning up to 75%
ELA33413
Jessica West
Northern Territory
786.91 Baudin Resources Pty Ltd 100% South32 earning up to 75%
ELA33414
Jessica West
Northern Territory
794.59 Baudin Resources Pty Ltd 100% South32 earning up to 75%
ELA33396
Aurora
Northern Territory
797.4 Baudin Resources Pty Ltd
ELA33397
Aurora
Northern Territory
796.53 Baudin Resources Pty Ltd
ELA33398
Aurora
Northern Territory
797.88 Baudin Resources Pty Ltd
ELA33399
Aurora
Northern Territory
797.58 Baudin Resources Pty Ltd
ELA33561
Aurora
Northern Territory
776.28 Baudin Resources Pty Ltd
ELA33562
Aurora
Northern Territory
798.12 Baudin Resources Pty Ltd
ELA33616
Broadmere
Northern Territory
821.83 Baudin Resources Pty Ltd
ELA33617
Broadmere
Northern Territory
396.04 Baudin Resources Pty Ltd
ELA33626
Birrindudu
Northern Territory
817.28 Baudin Resources Pty Ltd
ELA33627
Birrindudu
Northern Territory
819.14 Baudin Resources Pty Ltd
ELA33630
Birrindudu
Northern Territory
821.14 Baudin Resources Pty Ltd
ELA33631
Birrindudu
Northern Territory
820.83 Baudin Resources Pty Ltd
ELA33632
Birrindudu
Northern Territory
782.07 Baudin Resources Pty Ltd
E45/2500
Yeneena
Paterson
E45/2502
Yeneena
E45/2657
Yeneena
E45/2658
Yeneena
E45/3768
Yeneena
E45/2805
Yeneena
E45/2806
Yeneena
E45/5379
Yeneena
E45/5333
Yeneena
E45/5334
Yeneena
E45/5686
Yeneena
E45/4861
Yeneena
Paterson
Paterson
Paterson
Paterson
Paterson
Paterson
Paterson
Paterson
Paterson
Paterson
Paterson
107.3 IGO Limited
117.8 IGO Limited
156 IGO Limited
95.4 IGO Limited
149.7 IGO Limited
85.8 IGO Limited
35 IGO Limited
235.3 IGO Limited
127.2 IGO Limited
102.1 IGO Limited
108.4 IGO Limited
328 IGO Limited
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
0% * Option to Purchase
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
100% IGO earning up to 70%
20 E N C O U N T E R R E S O U R C E S L I M I T E D
Lease
Lease Name
Project Name
Area km2
Managing
Company
EL32156
EL32157
EL32158
EL32159
EL32226
EL32329
EL32437
EL32581
ELA32703
ELA32729
ELA32730
EL32273
EL32317
EL32338
EL32339
EL32386
EL32387
EL32388
EL32493
EL33332
EL33334
EL32476
EL32477
EL32701
EL32813
Elliott
Elliott
Elliott
Elliott
Elliott
Elliott
Elliott
Elliott
Elliott
Elliott
Elliott
Jessica
Jessica
Jessica
Jessica
Jessica
Jessica
Jessica
Jessica
Jessica
Jessica
Carrara
Carrara
Carrara
Carrara
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Northern Territory
Summary of tenements as of 30th September 2023.
*
Shumwari Option IGO JV
** Mining Lease application – M45/1304 (687.41 hectares)
Summary of Tenements
03.
Encounter Interest
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% BHP earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
100% South32 earning up to 75%
807.26
696.31
793.71
723.9
813.56
136.99
601.11
493.6
756.11
672.64
757.92
750.46
738.6
783.5
791.42
814.55
814.94
813.76
811.55
812.77
814.13
805.42
805.21
801.69
BHP
BHP
BHP
BHP
BHP
BHP
BHP
BHP
BHP
BHP
BHP
South32
South32
South32
South32
South32
South32
South32
South32
South32
South32
South32
South32
South32
22.72
South32
100% South32 earning up to 75%
2 0 2 3 A N N U A L R E P O R T
21
04.
Directors’
Report
The Directors present their report on Encounter Resources Limited (the Company) and the
entities it controlled (the Group) at the end of, and during the year ended 30 June 2023.
Directors
The names and details of the Directors of Encounter Resources Limited during the financial year and until the date of this report are:
Paul Chapman – B.Comm, ACA, Grad. Dip. Tax, MAICD, MAusIMM
Non-Executive Chairman appointed 7 October 2005
Mr Chapman is a chartered accountant with over 30 years’ experience in the resources sector gained in Australia and the United
States. Mr Chapman has experience across a range of commodity businesses including gold, nickel, uranium, manganese,
bauxite/alumina and oil/gas and has held managing director and other senior management roles in public companies. Mr
Chapman was a founding shareholder/director of the following ASX listed companies: Reliance Mining; Encounter Resources;
Rex Minerals; Paringa Resources; Silver Lake Resources and Black Cat Syndicate.
Mr Chapman is currently a director of Western Australia based explorers, including Black Cat Syndicate Limited (ASX:BC8),
Dreadnought Resources Limited (ASX:DRE), Meeka Metals Limited (ASX:MEK) as Non-Executive Chairman, and Queensland
focussed explorer Sunshine Gold Limited (ASX:SHN) as a Non-Executive Director.
Will Robinson – B.Comm, MAusIMM
Managing Director (Executive) appointed 30 June 2004
Mr Robinson has worked in the resources industry in Australia and Canada for over twenty-five years. Mr Robinson’s experience
includes senior management roles at a large international resources company and executive roles in the junior mining and
exploration sector. Mr Robinson is former president of the resources industry advocacy body, the Association of Mining and
Exploration Companies (AMEC) a member of the Strategic Advisory Board at the Centre for Exploration Targeting University of
Western Australia and was a member of the Australian Government’s Resources 2030 Taskforce. Mr Robinson is a Non-Executive
Director of Hampton Hill Mining NL (delisted from ASX effective 21 March 2022) and Non-Executive Chairman of Hamelin Gold
Limited (ASX:HMG).
22 E N C O U N T E R R E S O U R C E S L I M I T E D
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Directors’ Report04. Peter Bewick – B.Eng (Hons), MAusIMM
Non-Executive Director appointed 7 October 2005 (Executive Director to 1 November 2021)
Mr Bewick is a geology graduate from the WA School of Mines with over 30 years of industry experience. He held a number of
senior mine and exploration geological roles during a 14-year career with WMC, including Exploration Manager and Geology
Manager of the Kambalda Nickel Operations and Exploration Manager for St Ives Gold Operations. Mr Bewick also held
corporate roles with WMC as Exploration Manager for the Nickel Business Unit and Exploration Manager for North America
based in Denver, Colorado. He has extensive experience in project generation for a range of commodities including nickel, gold,
copper and bauxite. Mr Bewick has been a member of the MERIWA College since 2013.
Mr Bewick is currently Managing Director of Hamelin Gold Ltd (ASX:HMG) and Non-Executive Director of Mincor Resources NL.
Jonathan Hronsky OAM - BAppSci, PhD, MAusIMM, FSEG
Non-executive director appointed 10 May 2007
Dr. Hronsky has more than thirty five years of experience in the mineral exploration industry, primarily focused on project
generation, technical innovation and exploration strategy development. Dr. Hronsky has particular expertise in targeting
for nickel sulfide deposits, but has worked across a diverse range of commodities. His work led to the discovery of the West
Musgrave nickel sulfide province in Western Australia. Dr. Hronsky was most recently Manager-Strategy & Generative Services
for BHP Billiton Mineral Exploration. Prior to that, he was Global Geoscience Leader for WMC Resources Ltd. He is currently a
Director of exploration consulting group Western Mining Services and former Chairman of the board of management of the
Centre for Exploration Targeting at the University of Western Australia.
During the last 3 years Dr Hronsky has been a director of Cassini Resources Limited until its acquisition by Oz Minerals Limited
in 2020. Dr Hronsky is currently a Non-Executive Director of Paladin Energy Limited (ASX:PDN), Caspin Resources Limited
(ASX:CPN) and Azumah Resources Limited (delisted from ASX 19 February 2020).
Philip Crutchfield – B. Comm, LL.B (Hons), LL.M LSE
Non-executive director appointed 9 October 2019
Mr Crutchfield is a prominent and highly respected barrister specialising in commercial law. Philip was Non-Executive Chairman
of Zip Co Limited (ASX:Z1P) (resigned 2nd March 2021) and is Non-Executive Director of Applyflow Limited (ASX:AFW),
Dreadnought Resources Limited (ASX:DRE), and Western Australian gold focused companies Black Cat Syndicate Limited
(ASX:BC8) and Hamelin Gold Limited (ASX:HMG).
Mr Crutchfield is a board member of the Bell Shakespeare Theatre Company and the Victorian Bar Foundation Limited. Philip is
also a former partner of Mallesons Stephen Jaques (now King & Wood Mallesons).
Company Secretaries
Kevin Hart – B.Comm, FCA
Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 4 November 2005. Mr Hart
has over 30 years experience in accounting and the management and administration of public listed entities in the mining and
exploration industry.
Mr Hart is currently a director of an advisory firm, Endeavour Corporate, which specialises in the provision of company secretarial
and accounting services to ASX listed entities.
Dan Travers – BSc (Hons), FCCA
Mr Travers is a Fellow of the Association of Chartered Certified Accountants and was appointed to the position of Joint Company
Secretary on 20 November 2008. Mr Travers is an employee of Endeavour Corporate, which specialises in the provision of
company secretarial and accounting services to ASX listed entities in the mining and exploration industry.
22 E N C O U N T E R R E S O U R C E S L I M I T E D
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Directors’ Report04. Directors’ Interests
As at the date of this report the Directors’ interests in shares and unlisted options of the Company are as follows:
Director
P Chapman
W Robinson
P Bewick
J Hronsky
P Crutchfield
Directors’ Interests in
Ordinary Shares
Directors’ Interests in
Unlisted Options
10,782,150
27,285,889
9,510,303
1,051,335
4,559,391
3,410,000
2,410,000
3,130,000
1,000,000
4,110,000
Included in the Directors’ Interests in Unlisted Options are 14,060,000 options that are vested and exercisable as at the date of
signing this report.
Principal Activities
The principal activity of the Company during the financial year was project generation, mineral exploration and project
development in Western Australia and the Northern Territory.
There were no significant changes in these activities during the financial year.
Directors’ Meetings
The number of meetings of the Company’s Directors held during the year ended 30 June 2023, and the number of meetings
attended by each Director are as follows:
Director
P Chapman
W Robinson
P Bewick
J Hronsky
P Crutchfield
Results of Operations
Board of Directors’ Meetings
Audit Committee Meetings
Held
Attended
Held
Attended
9
9
9
9
9
8
9
9
9
8
2
-
-
2
2
2
-
-
1
2
The consolidated net loss after income tax for the financial year was $1,429,900 (2022: profit $4,428,194).
Included in the consolidated loss for the current year is a write-off of deferred and uncapitalised exploration and joint venture
expenditure totalling $236,762 (2022: $4,204,574).
Included in the result for the prior financial year is a gain of $10,104,846 recognised on the demerger of Hamelin Gold Limited
from the Group.
24 E N C O U N T E R R E S O U R C E S L I M I T E D
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Directors’ Report04.
Review of Activities
Exploration
Encounter’s primary focus is on discovering major copper and critical minerals deposits in Australia. Encounter’s exploration
activities during the year were directed towards:
• The 100% owned Aileron copper-critical minerals project in the West Arunta in WA;
• A series of camp scale, first mover copper opportunities in the Northern Territory. This includes the Elliott copper project
which is being advanced in partnership with BHP via a $25m earn-in and joint venture and farm-in agreements with South32
Limited, carried to completion of a scoping study, at the Jessica and Carrara projects; and
• A large project portfolio in the Paterson Province of WA where it is exploring for copper-gold deposits at its 100% owned
Lamil Project and for copper-cobalt deposits at the Yeneena project with IGO Limited (ASX:IGO).
Financial Position
At the end of the financial year the Group had $11,817,728 (2022: $2,165,945) in cash and term deposits. Capitalised mineral
exploration and evaluation expenditure is $17,783,090 (2022: $13,891,414).
Matters Subsequent to the End of the Financial Year
Subsequent to the end of the financial period the Company has issued a total of 1,200,000 unlisted options to employees
pursuant to the terms of the Company’s Employee and Share Option Plan.
Other than as already stated in this report, there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to
affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent
financial years.
Significant Changes in the State of Affairs
Other than stated in this report, there have been no significant changes in the state of affairs of the Company and Group during
or since the end of the financial year.
24 E N C O U N T E R R E S O U R C E S L I M I T E D
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25
Directors’ Report04. Options over Unissued Capital
Unlisted Options
As at the date of this report 24,010,000 unissued ordinary shares of the Company are under option as follows:
Number of
Options Granted
Exercise Price
1,500,000
5,050,000
650,000
2,450,000
800,000
3,630,000
1,200,000
1,000,000
1,000,000
3,980,000
250,000
500,000
100,000
500,000
200,000
400,000
400,000
400,000
8.2 cents
16.2 cents
18.2 cents
22.2 cents
21.2 cents
22.4 cents
19.0 cents
20.0 cents
30.0 cents
26.8 cents
28.3 cents
20.8 cents
17.5 cents
50.0 cents
36.8 cents
59.2 cents
67.7 cents
68.9 cents
Expiry Date
30 November 2023
31 October 2023
30 June 2024
26 November 2024
30 April 2025
28 November 2025
28 June 2026
29 September 2025
29 September 2025
30 November 2026
15 January 2027
28 February 2027
27 March 2027
29 May 2026
20 June 2027
13 July 2027
24 July 2027
1 August 2027
All options on issue at the date of this report are vested and exercisable. No options on issue are listed.
During the financial year:
• 7,530,000 options (2022: 5,030,000) were granted over unissued shares of the Company;
• nil options (2022: 400,000) were cancelled on the cessation of employment;
• nil options (2022: 1,500,000) were cancelled on expiry of the exercise period; and
• 2,900,000 (2022: 1,650,000) options were exercised at 5.2 cents per share. Included in options exercised is an amount of
424,379 options foregone in consideration given on exercise (2022: 689,697).
Since the end of the financial year:
• 1,200,000 (2022: nil) options have been issued by the Company to employees pursuant to the Company’s Employee Option
Plan;
• nil options have been exercised; and
• nil options have been cancelled due to the lapse of the exercise period.
Options do not entitle the holder to participate in any share issue of the Company or any other body corporate. The holders of
unlisted options are not entitled to any voting rights until the options are exercised into ordinary shares.
26 E N C O U N T E R R E S O U R C E S L I M I T E D
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27
Directors’ Report04. Issued Capital
Number of Shares on Issue
Ordinary fully paid shares
2023
395,525,781
2022
317,216,826
Likely Developments and Expected Results of Operations
The Group expects to maintain exploration programs at its 100% owned West Arunta copper-critical minerals project, Northern
Territory copper and lithium projects and the Paterson copper-gold project,.
In addition, the Group will continue to collaborate with its partners at the Yeneena copper-cobalt project (with IGO Limited) and
in the Northern Territory at the Elliott copper project (BHP) and Jessica and Carrara base metals projects (South32) pursuant to
earn-in and joint venture arrangements.
Disclosure of any further information has not been included in this report because, in the reasonable opinion of the Directors to
do so would be likely to prejudice the business activities of the Group and is dependent upon the results of the future exploration
and evaluation.
Dividends
No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year.
Environmental Regulation and Performance
The Group holds various exploration licences to regulate its exploration activities in Australia. These licences include conditions
and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration activities. So far as the
Directors are aware, all current exploration activities are in compliance with relevant environmental regulations.
Remuneration Report (Audited)
Remuneration paid to Directors and Officers of the Company is set by reference to such payments made by other ASX listed
companies of a similar size and operating in the mineral exploration industry. In addition, reference is made to the financial
position of the Company and the specific skills and experience of the Directors and Officers.
Details of the nature and amount of remuneration of each Director, and other Key Management Personnel if applicable, are
disclosed annually in the Company’s Annual Report.
Remuneration Committee
The Board has adopted a formal Remuneration Committee Charter which provides a framework for the consideration of
remuneration matters.
The Company does not have a separate remuneration committee and as such all remuneration matters are considered by the
Board as a whole, with no Member deliberating or considering such matter in respect of their own remuneration.
In the absence of a separate Remuneration Committee, the Board is responsible for:
1. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key Management Personnel; and
2.
Implementing employee incentive and equity-based plans and making awards pursuant to those plans.
26 E N C O U N T E R R E S O U R C E S L I M I T E D
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27
Directors’ Report04. Remuneration Report (Audited) (Continued)
Non-Executive Remuneration
The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX listed companies in the same
industry, for their time, commitment and responsibilities.
Non-Executive Remuneration is not linked to the performance of the Company, however to align Directors’ interests with
shareholders’ interests, remuneration may be provided to Non-Executive Directors in the form of equity based long term
incentives.
1. Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the Company’s
Annual General Meeting;
2. Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits;
3. Non-Executive superannuation benefits are limited to statutory superannuation entitlements; and
4. Non-executive directors are offered an annual election to receive cash remuneration or an equivalent amount in unlisted
options. The annual election relates to the remuneration period from 1 December to 30 November of the relevant year and is
subject to approval by the Company’s shareholders.
5. Participation in equity-based remuneration schemes by Non-Executive Directors is subject to consideration and approval by
the Company’s shareholders.
The maximum Non-Executive Directors fees (excluding equity-based remuneration otherwise approved by shareholders),
payable in aggregate are currently set at $300,000 per annum.
Executive Director and Other Key Management Personnel Remuneration
Executive remuneration consists of base salary, plus other performance incentives to ensure that:
1. Remuneration packages incorporate a balance between fixed and incentive pay, reflecting short and long-term performance
objectives appropriate to the Company’s circumstances and objectives; and
2. A proportion of remuneration is structured in a manner to link reward to corporate and individual performances.
Executives are offered a competitive level of base salary at market rates (based on comparable ASX listed companies) and are
reviewed regularly to ensure market competitiveness. To date, the Company has not engaged external remuneration consultants
to advise the Board on remuneration matters.
Incentive Plans
The Company provides long term incentives to Directors and Employees pursuant to the Encounter Resources Employee Share
Option Plan, which was last approved by shareholders at the Annual General Meeting held on 26 November 2021.
The Board, acting in remuneration matters:
1. Ensures that incentive plans are designed around appropriate and realistic performance targets and provide rewards when
those targets are achieved;
2. Reviews and approves existing incentive plans established for employees; and
3. Approves the administration of the incentive plans, including receiving recommendations for, and the consideration and
approval of grants pursuant to such incentive plans.
Engagement of Non-Executive Directors
Non-Executive Directors conduct their duties under the following terms:
1. A Non-Executive Director may resign from their position and thus terminate their contract on written notice to the Company;
and
2. A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the expiration of their
period of office (if applicable). Payment is made in lieu of any notice period if termination is initiated by the Company, except
where termination is initiated for serious misconduct.
28 E N C O U N T E R R E S O U R C E S L I M I T E D
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Directors’ Report04. In consideration of the services provided by Non-Executive Directors, the Company pay them $50,000 plus statutory
superannuation per annum.
Non-Executive Directors are also entitled to fees for other amounts as the Board determines where they perform special duties
or otherwise perform extra services or make special exertions on behalf of the Company. During the year the Group incurred
costs of $14,490 (2022: $17,842), for geological consulting services from Western Mining Services, an entity associated with
Dr Jon Hronsky. In addition, the Company incurred costs of $3,900 (2022: $nil) with Western Mining Services in relation to the
attendance of training courses by employees of the Company.
For the period 1 December 2022 to 30 November 2023, Non-Executive Directors Mr Paul Chapman and Mr Philip Crutchfield
elected to receive options in lieu of directors’ fees paid in cash. A total of 1,720,000 options were issued in respect of this election
following shareholder approval at the Company’s 2022 annual general meeting (for further details refer to the notice of meeting
lodged with ASX on 28 October 2022).
Engagement of Executive Directors
The Company has entered into an executive service agreement with Mr Will Robinson on the following material terms and
conditions:
Mr Robinson’s current service agreement with the Company, in respect of his engagement as Managing Director, is effective
from 1 October 2019. Mr Robinson will receive a base salary of $270,000 per annum plus statutory superannuation.
An Executive director may also receive an annual short-term performance-based bonus which may be calculated as a
percentage of their current base salary, the performance criteria, assessment and timing of which is negotiated annually with the
Non-Executive Directors.
Either party may give the other six months notice in writing to terminate the Services Agreement or with payment or forfeiture in
lieu. The Company may terminate the respective services agreements without notice for serious misconduct by an executive
director.
Executive directors may, subject to shareholder approval, participate in the Encounter Resources Employee Share Option Plan
and other long term incentive plans adopted by the Board.
Short Term Incentive Payments
Each year, the Non-Executive Directors set the Key Performance Indicators (KPI’s) for the Executive Directors. The KPI’s are
chosen to align the reward of the individual Executives to the strategy and performance of the Company.
Performance objectives, which may be financial or non-financial, or a combination of both, are weighted when calculating the
maximum short-term incentives payable to Executives. At the end of the year, the Non-Executive Directors will assess the actual
performance of the Executives against the set Performance Objectives. The maximum amount of the short-term incentive, or a
lesser amount depending on actual performance achieved is paid to the Executives as a cash payment.
Shareholding Qualifications
The Directors are not required to hold any shares in Encounter Resources under the terms of the Company’s constitution.
However, Directors have made their own investment decisions to hold shares in Encounter Resources which are shown in this
report.
Group Performance
In considering the Company’s performance, the Board provides the following indices in respect of the current financial year and
previous financial years:
Profit/(Loss) for the year
attributable to shareholders
2023
2022
2021
2020
2019
$(1,429,900)
$4,428,194
$(1,533,150)
$(1,126,275)
$(1,064,491)
Closing share price at 30 June
$0.455
$0.12
$0.155
$0.15
$0.07
28 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
29
Directors’ Report04. Remuneration Report (Audited) (Continued)
As an exploration company, the Board does not consider the profit/(loss) attributable to shareholders as one of the performance
indicators when implementing Short Term Incentive Payments. In addition to economic and technical exploration success, the
Board considers more appropriate indicators of management performance for the 2023 financial period to include:
• corporate management and business development (including the identification and acquisition of high quality projects);
• project and operational performance (including safety and environmental management);
• management of the Company’s farm-in and joint venture arrangements; and
• cash flow and funding management.
Remuneration Disclosures
The Key Management Personnel of the Company have been identified as:
Mr Paul Chapman
Mr Will Robinson
Mr Peter Bewick
Dr Jon Hronsky
Non-Executive Chairman
Managing Director
Non-Executive Director (Executive Director to 1 November 2021)
Non-Executive Director
Mr Philip Crutchfield
Non-Executive Director
The details of the remuneration of each Director and member of Key Management Personnel of the Company is as follows:
30 June 2023
Base Salary
Short Term
Incentive
Superannuation
Contributions
Value of Options
Short Term
Post Employment Other Long Term
Paul Chapman
Will Robinson
Peter Bewick
Jon Hronsky
$
-
270,000
50,000
50,000
Philip Crutchfield
-
$
-
71,550
64,751
-
-
$
-
28,350
12,049
5,250
-
Total
370,000
136,301
45,649
$
110,620
78,623
31,997
31,997
110,620
363,857
Total
$
110,620
448,523
158,797
87,247
110,620
915,807
Value of Options
as Proportion of
Remuneration
100.0%
17.5%
20.1%
36.7%
100.0%
30 June 2022
Base Salary
Short Term
Incentive
Superannuation
Contributions
Value of Options
Total
Short Term
Post Employment Other Long Term
$
$
$
$
Value of Options
as Proportion of
Remuneration
$
Paul Chapman
Will Robinson
Peter Bewick
Jon Hronsky
-
270,000
123,333
50,000
Philip Crutchfield
-
Total
443,333
-
-
-
-
-
-
-
27,000
12,333
5,000
-
49,688
35,491
14,196
14,196
49,688
49,688
332,491
149,862
69,196
49,688
100.0%
10.7%
9.5%
20.5%
100.0%
44,333
163,259
650,925
30 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
31
Directors’ Report04. Details of Performance Related Remuneration
During the year ended 30 June 2023 total short-term incentive bonuses (STI), measured for the periods 1 January 2020 to
31 December 2020 and 1 January 2021 to 31 December 2021, were awarded to the Company’s Executive Directors for the
respective periods as follows:
Will Robinson
Peter Bewick
1 STI bonus stated inclusive of SGC contributions where applicable.
Short term incentive payments - cash bonuses paid
2022/23 financial year
2021/22 financial year
$71,5501
$71,5501
Nil
Nil
Executives eligible for the STI are able to earn a bonus of up to a maximum of 25% of their corresponding base remuneration,
with the final amount determined by performance against the below stated performance objectives.
The STI performance objectives for the abovementioned STI for the measurement periods ended 31 December 2020 and 31
December 2021 were as follows:
Performance Objective 1 (PO1) (Weighting up to 50%):
Successful execution of the Company’s strategies and budget plans leading to first-rate outcomes for safety, environmental,
operational performance and corporate culture. This includes:
• Safety, environmental, operational performance and corporate culture
• Management of existing Earn-in and Joint Venture Agreements
• Commercialisation of additional projects through completion of a joint ventures or similar funding
• Management of the equity structure and cash position
• Market sensitive announcements
This objective is determined at the discretion of the board.
Performance Objective 2 (PO2) (Weighting up to 50%):
Shareholder returns – determined by Encounter’s volume weighted average share price (VWAP) exceeding the Company’s
VWAP for the preceding 12-month period. Assuming a year on year (YOY) increase in the Company’s VWAP, the potential
executive bonus:
YOY ENR Share Price VWAP Change
$ % Weighting
<=10%
>10% < 20%
>20% < 40%
>40% <60%
>60% <80%
>80%
0
10%
20%
30%
40%
50%
30 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
31
Directors’ Report04. Remuneration Report (Audited) (Continued)
The total STI bonuses awarded and paid during the financial year ended 30 June 2023, has been determined against the
abovementioned performance objectives for both the Managing Director and Exploration Director as follows:
STI Period Ended
31 Dec 2020
31 Dec 2021
Maximum
potential STI
bonus
($)
$67,500
$67,500
PO1
maximum
PO1
achieved
PO2
maximum
PO2
achieved
Total STI
bonus
achieved
Total STI
bonus
achieved
%
50%
50%
%
37%
39%
%
50%
50%
%
30%
0%
($)
67%
39%
($)
$45,225
$26,325
$71,550
The above STI bonuses awarded were paid to the executives during the year as follows:
Will Robinson
Peter Bewick
Cash (pre-tax)
SGC contribution
Total STI Bonus ($)
$71,550
$64,751
Nil
$6,799
$71,550
$71,550
Equity instrument disclosures relating to key management personnel
Options Granted as Remuneration
During the financial year ended 30 June 2023 3,980,000 options (2022: 2,070,000) were granted to Directors or Key
Management Personnel of the Company, as follows:
Options issued in lieu of payment of director fees:
Paul Chapman
Philip Crutchfield
Incentive options:
Paul Chapman
Will Robinson
Peter Bewick
Jon Hronsky
Philip Crutchfield
860,000
860,000
350,000
860,000
350,000
350,000
350,000
The fair value of options issued as remuneration is allocated to the relevant vesting period of the options. Options are provided at
no cost to the recipients.
32 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
33
Directors’ Report04. Exercise of Options Granted as Remuneration
During the year 2,075,621 (2022: 60,303) ordinary shares were issued in respect of the exercise of options previously granted as
remuneration to Directors or Key Management Personnel of the Company, as follows:
KMP
Peter Bewick
Jon Hronsky
Number of shares issued
on exercise of options
Option details
1,500,000
575,6211
Options exercisable at $0.052 expiring 30 November 2022
Options exercisable at $0.052 expiring 30 November 2022
1 575,621 ordinary fully paid shares issued on the exercise of 1,000,000 options pursuant to the cash less exercise provisions of the options.
Option holdings
Key Management Personnel have the following interests in unlisted options over unissued shares of the Company:
2023
Name
P. Chapman
W. Robinson
P. Bewick
J. Hronsky
P. Crutchfield
Balance at
start of the year
Received during the
year as remuneration
Other changes
during the year1
Balance at
the end of the year
Vested and exercisable
at the end of the year
2,200,000
1,550,000
4,280,000
1,650,000
2,900,000
1,210,000
860,000
350,000
350,000
1,210,000
-
-
(1,500,000)
(1,000,000)
-
3,410,000
2,410,000
3,130,000
1,000,000
4,110,000
3,410,000
2,410,000
3,130,000
1,000,000
4,110,000
1 Options exercised during the financial year.
Share holdings
The number of shares in the Company held during the financial year by key management personnel of the Company, including
their related parties are set out below. There were no shares granted during the reporting period as compensation.
2023
Name
P. Chapman
W. Robinson
P. Bewick
J. Hronsky
P. Crutchfield
Balance at
start of the year
9,948,816
26,452,556
8,010,303
475,714
3,371,448
Received during the
year on exercise of
options
Other changes
during the year
Balance at
the end of the year
-
-
1,500,000
575,621
833,334
833,333
-
-
-
1,187,943
10,782,150
27,285,889
9,510,303
1,051,335
4,559,391
Loans made to key management personnel
No loans were made to key personnel, including personally related entities during the reporting period.
Other transactions with key management personnel
During the year the Group incurred costs of $14,490 (2022: $17,842), for geological consulting services from Western Mining
Services, an entity associated with Dr Jon Hronsky.
There were no other transactions with key management personnel.
End of Remuneration Report
32 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
33
Directors’ Report04. Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company or Group, or to intervene in any proceedings to which the Company or Group is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Officers’ Indemnities and Insurance
During the year the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company
covered by the insurance policy include the Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil
or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as
officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the
Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under
the insurance policy.
The Company has not provided any insurance for an auditor of the Company.
Non-audit Services
During the year Crowe Perth the Company’s auditor, has not performed any other services in addition to their statutory duties.
Total remuneration paid to auditors during the financial year:
2023
$
2022
$
Audit and review of the Company’s financial statements
37,000
33,050
The board considers any non-audit services provided during the year by the auditor and satisfies itself that the provision of any
non-audit services during the year by the auditor is compatible with, and does not compromise, the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services are reviewed by the board to ensure they do not impact the impartiality and objectivity of the auditor; and
•
the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the auditor’s own work, acting in
a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks
and rewards.
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on the
following page.
This report is made in accordance with a resolution of the Directors.
Dated at Perth this 28th day of September 2023.
W Robinson
Managing Director
34 E N C O U N T E R R E S O U R C E S L I M I T E D
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2 0 2 3 A N N U A L R E P O R T
35
Directors’ Report04. Auditor’s Independence
Declaration
34 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
35
Directors’ Report04. Crowe Perth ABN 96 844 819 235 Level 24, Allendale Square 77 St Georges Terrace Perth WA 6000 PO Box P1213 Perth WA 6844 Australia Main +61 (8) 9481 1448 Fax +61 (8) 9481 0152 www.crowe.com.au Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer applies to them. If you have any questions about the applicability of Professional Standards Legislation Crowe’s personnel involved in preparing this document, please speak to your Crowe adviser. Liability limited by a scheme approved under Professional Standards Legislation. The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by Findex Group Limited are conducted by a privately owned organisation and/or its subsidiaries. Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Perth, an affiliate of Findex (Aust) Pty Ltd © 2023 Findex (Aust) Pty Ltd 18 DECLARATION OF INDEPENDENCE BY SUWARTI ASMONO TO THE DIRECTORS OF ENCOUNTER RESOURCES LIMITED As lead auditor for the audit of Encounter Resources Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Encounter Resources Limited and the entities it controlled during the year. Crowe Perth Suwarti Asmono Partner Dated at Perth this 28th day of September 2023 Consolidated
Financial
Statements
For the Year Ended 30 June 2023
36 E N C O U N T E R R E S O U R C E S L I M I T E D
Consolidated Financial Statements
Consolidated Statement of Profit or Loss and Other
Comprehensive Income For the financial year ended 30 June 2023
Interest income
Gain on demerger
Other income
Total income
Employee expenses
Employee expenses recharged to exploration
Equity based remuneration expense
(Loss)/Gain in fair value of financial assets
Depreciation and amortisation expense
Corporate expenses
Administration and other expenses
Exploration costs written off and expensed
Profit/(Loss) before income tax
Income tax benefit
Profit/(Loss) after tax
Other comprehensive income
Total comprehensive income/(loss) for the year
Earnings per share for loss attributable to the ordinary equity holders of
the Company
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Consolidated
2023
$
2022
$
96,565
10,349
-
10,104,846
164,125
260,690
(1,338,186)
981,127
(460,745)
(59,519)
(73,766)
(112,981)
(389,758)
(236,762)
(1,429,900)
-
179,303
10,294,498
(1,114,583)
907,847
(379,845)
(447,700)
(68,642)
(75,973)
(399,501)
(4,204,574)
4,428,194
-
(1,429,900)
4,428,194
-
-
(1,429,900)
4,428,194
(0.4)
(0.4)
1.4
1.4
Note
33
5
20
6,11
6
6,14
7
21
31
31
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
2 0 2 3 A N N U A L R E P O R T
37
Consolidated Statement of Financial Position As at 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Assets reclassified as held for sale
Total current assets
Non-current assets
Security bonds and deposits
Financial assets
Property, plant and equipment
Capitalised mineral exploration and evaluation expenditure
Right of use assets - leases
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Employee benefits
Lease Liabilities
Total current liabilities
Total non-current liabilities
Lease Liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Accumulated losses
Equity remuneration reserve
Total equity
Note
8
9(a)
9(b)
8(c)
11
12
14
13
16
17
18
18
19
21
21
Consolidated
2023
$
2022
$
11,817,728
2,165,945
94,472
181,846
244,355
13,479
-
12,094,046
2,423,779
75,652
59,342
92,400
75,695
118,861
44,210
17,783,090
13,891,414
43,621
18,054,105
30,148,151
987,801
267,668
49,059
1,304,528
-
-
1,304,528
28,843,623
109,057
14,239,237
16,663,016
128,115
225,024
67,713
420,852
49,241
49,241
470,093
16,192,923
55,158,968
41,666,888
(28,103,156)
(26,698,304)
1,787,811
28,843,623
1,224,339
16,192,923
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
38 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
39
Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity For the financial year ended 30 June 2023
2022
Consolidated
Accumulated
\losses
Equity
remuneration
reserve
$
$
Issued
capital
$
Total
$
Balance at the start of the financial year
50,000,566
(29,535,096)
1,041,896
21,507,366
Comprehensive income for the financial year
Movement in equity remuneration reserve in
respect of options vested
Transfer on exercise and/or cancella-tion of
vested options
Derecognition of accumulated losses on
demerger of subsidiary
-
-
4,428,194
-
-
379,845
4,428,194
379,845
8,262
189,140
(197,402)
-
-
294,156
-
-
-
294,156
(10,489,813)
73,175
Capital return on in-specie distribution (note 33)
(8,415,115)
(2,074,698)
Transactions with equity holders in their
capacity as equity holders:
Shares issued (net of costs)
73,175
-
Balance at the end of the financial year
41,666,888
(26,698,304)
1,224,339
16,192,923
2023
Comprehensive income for the financial year
Movement in equity remuneration reserve in
respect of options vested
Transfer on exercise and/or cancellation of
vested options
Transactions with equity holders in their
capacity as equity holders:
Shares issued (net of costs)
Consolidated
Accumulated
losses
Equity
remuneration
reserve
$
$
Issued
capital
$
Total
$
-
-
(1,429,900)
-
(1,429,900)
-
618,452
618,452
29,932
25,048
(54,980)
-
13,462,148
-
-
13,462,148
Balance at the end of the financial year
55,158,968
(28,103,156)
1,787,811
28,843,623
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
38 E N C O U N T E R R E S O U R C E S L I M I T E D
2 0 2 3 A N N U A L R E P O R T
39
Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows For the financial year ended 30 June 2023
Note
30
Cash flows from operating activities
Receipts from tenement option fee income
Receipts from other income
Interest received
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Funds received – subsidiary initial public offer
Cash assets transferred on demerger of subsidiary
Payments for amounts incurred on behalf of related party
Proceeds on repayment of related party loans
Consolidated
2023
$
2022
$
30,000
139,714
96,608
(837,764)
(571,442)
-
-
-
-
25,000
25,646
10,306
(776,274)
(715,322)
7,478,125
(7,478,304)
(420,101)
335,175
170,248
Contributions received from project generation alliance and farm-in partners
9,844
Payments for exploration and evaluation
State Government funded drilling rebate
R&D tax concession for exploration activities
Payments for plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from loans received
Payments for loans repaid
Proceeds from the issue of shares
Payments for share issue costs
Repayment of Lease Liability
Net cash from financing activities
Net (decrease)/increase in cash held
Cash at the beginning of the financial year
Cash at the end of the financial year
(3,607,292)
(3,055,354)
295,934
66,118
(86,411)
152,295
13,749
(1,750)
(3,321,807)
(2,805,917)
-
-
14,398,800
(778,945)
(74,823)
13,545,032
9,651,783
2,165,945
8(a)
11,817,728
32,849
(32,849)
76,925
(3,749)
(72,497)
679
(3,520,560)
5,686,505
2,165,945
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
40 E N C O U N T E R R E S O U R C E S L I M I T E D
Notes to the Financial Statements
Notes to
the Financial
Statements
For the financial year ended 30 June 2023
Note 1 Summary of significant accounting policies
Note 2 Financial risk management
Note 3 Critical accounting estimates and judgements
Note 4 Segment information
Note 5 Other income
Note 6 Loss for the year
Note 7
Income tax
Note 8 Current assets – Cash and cash equivalents
Note 9 Current assets – Receivables
42
48
49
49
49
50
50
52
53
Note 17 Current liabilities – Employee benefits
Note 18 Current liabilities – Lease liabilities
Note 19 Issued capital
Note 20 Options and share based payments
Note 21 Reserves and accumulated losses
Note 22 Financial instruments
Note 23 Dividends
Note 24 Key management personnel disclosures
Note 25 Remuneration of auditors
Note 10 Non-current assets – Investment in controlled
Note 26 Contingencies
entities
54
Note 27 Commitments
Note 11 Financial assets – Investments Designated at
Fair Value through Profit or Loss
55
Note 28 Related party transactions
Note 12 Non-current assets – Property, plant and
equipment
55
Note 14 Non-current assets – Capitalised mineral
exploration and evaluation expenditure
57
Note 29 Events occurring after the balance sheet date
Note 30 Reconciliation of loss after tax to net cash
inflow from operating activities
68
Note 31 Earnings per share
Note 15 Interest in joint ventures and farm-in
arrangements
58
Note 32 Parent entity information
Note 16 Current liabilities – Trade and other payables
59
Note 33 Demerger of Hamelin Gold Limited
59
59
60
61
63
64
65
66
66
67
67
68
68
69
70
70
2 0 2 3 A N N U A L R E P O R T
41
Note 1 Summary of significant
accounting policies
Reporting basis and conventions
These financial statements have been prepared under the
historical cost convention, and on an accrual basis.
The principal accounting policies adopted in the preparation
of the financial report are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated. The financial report includes financial
statements for the consolidated entity consisting of Encounter
Resources Limited and its subsidiaries (“Group”).
Basis of preparation
This general-purpose financial report has been prepared
in accordance with Australian Equivalents to International
Financial Reporting Standards (“AIFRS”), other authoritative
pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001. The Group is a for-
profit entity for financial reporting purposes under Australian
Accounting Standards.
The financial report is presented in Australian dollars and all
values are rounded to the nearest dollar.
The separate financial statements of the parent entity have
not been presented within this financial report as permitted by
the Corporations Act 2001.
The financial report of the Group was authorised for issue in
accordance with a resolution of Directors on 28 September
2023.
Statement of Compliance
The consolidated financial report of Encounter Resources
Limited complies with Australian Accounting Standards,
which include AIFRS, in their entirety. Compliance with
AIFRS ensures that the financial report also complies with
International Financial Reporting Standards (“IFRS”) in their
entirety.
Adoption of new and revised Accounting Standards
The Group has adopted all of the new, revised or amending
Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (“AASB”) that are
mandatory for the current reporting period. The adoption
of these Accounting Standards and Interpretations did not
have any significant impact on the financial performance or
position of the Group during the financial year.
New standards and interpretations not yet adopted
The AASB has issued new and amended Accounting
Standards and Interpretations that have mandatory
application date for future reporting periods and which the
Group has decided not to early adopt.
Critical accounting estimates
The preparation of financial statements in conformity with
AIFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies. The
areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 3.
Principles of consolidation
The financial statements of subsidiary companies are
included in the consolidated financial statements from the
date control commences until the date control ceases. The
financial statements of subsidiary companies are prepared
for the same reporting period as the parent company, using
consistent accounting policies.
Inter-entity balances resulting from transactions with
or between controlled entities are eliminated in full on
consolidation. Investments in subsidiary companies are
accounted for at cost in the individual financial statements of
the Company.
(a) Segment reporting
Operating segments are identified and segment information
disclosed, where appropriate, on the basis of internal reports
reviewed by the Company’s board of directors, being the
Group’s Chief Operating Decision Maker, as defined by AASB 8.
(b) Other income
Interest income
Interest income is recognised on a time proportion basis and
is recognised as it accrues.
Option fee income
Recognised for option fee income at such time that the option
fee becoming receivable by the Company occurs.
Management fee income
Recognised for management fees from farm-in and alliance
partners during the period in which the Company provided
the relevant service.
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Notes to the Financial Statements (c) Income tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on
the national income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
the temporary differences between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary
timing differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on
those tax rates which are enacted or substantially enacted
for each jurisdiction. The relevant tax rates are applied to the
cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An
exception is made for certain temporary differences arising
from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to those timing
differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect
either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent
is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and liabilities are
offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts
recognised directly in equity are also recognised directly in
equity.
(d) Lease Liabilities
A lease liability is recognised at the commencement date
of a lease. The lease liability is initially recognised at the
present value of the lease payments to be made over the
term of the lease, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined,
the consolidated entity’s incremental borrowing rate.
Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend
on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option
when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties. The variable
lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using
the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future
lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase
option and termination penalties. When a lease liability is
remeasured, an adjustment is made to the corresponding
right-of use asset, or to profit or loss if the carrying amount of
the right-of-use asset is fully written down.
(e) Right of use assets
A right-of-use asset is recognised at the commencement date
of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted
for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received,
any initial direct costs incurred, and, except where included
in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis
over the unexpired period of the lease or the estimated
useful life of the asset, whichever is the shorter. Where the
consolidated entity expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is
over its estimated useful life. Right-of use assets are subject
to impairment or adjusted for any remeasurement of lease
liabilities.
The Group has elected not to recognise a right-of-use asset
and corresponding lease liability for short- term leases with
terms of 12 months or less and leases of low-value assets.
Lease payments on these assets are expensed to profit or loss
as incurred.
(f) Impairment of assets
Assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of
the cash inflows from other assets or groups of assets (cash
generating units). Non-financial assets, other than goodwill,
that suffered impairment are reviewed for possible reversal of
the impairment at each reporting date.
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Notes to the Financial Statements Note 1 Summary of significant
accounting policies (Continued)
(g) Cash and cash equivalents
For cash flow statement presentation purposes, cash and
cash equivalents includes cash on hand, deposits held at
call with financial institutions, other short term, highly liquid
investments with original maturities of three months or less
that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
(h) Government grants
Government grants are recognised at fair value where there
is reasonable assurance that the grant will be received and
all grant conditions will be met. Grants relating to expense
items are recognised as income over the periods necessary
to match the grant to the costs they are compensating. Grants
relating to assets are deducted from the carrying value of the
relevant asset.
Amounts receivable from the Australian Tax Office in respect
of research and development tax concession claims are
recognised in the year in which the claim is lodged with the
Australian Tax Office. Amounts receivable are allocated in
the financial statements against the corresponding expense
or asset in respect of which the research and development
concession claim has arisen.
(i) Fair value estimation
The nominal value less estimated credit adjustments of trade
receivables and payables are assumed to approximate their
fair values. The fair value of financial liabilities for disclosure
purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available
to the Group for similar financial instruments.
(j) Property, plant and equipment
Property, plant and equipment is stated at historical cost
less depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the assets.
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period
in which they are incurred.
Depreciation of property, plant and equipment is calculated
using the straight line and diminishing value methods to
allocate their cost, net of residual values, over their estimated
useful lives, as follows:
Asset Class
Depreciation Rate
Field equipment and vehicles
Office equipment
33%
33%
Leasehold improvements
Over the term of the lease
The asset’s residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount (note 1(f)). Gains and
losses on disposal are determined by comparing proceeds
with the carrying amount. These gains and losses are
included in the income statement.
(k) Non-Current Assets Classified as Held for Sale
Non-current assets that are expected to be recovered
primarily through sale rather than through continuing use, are
classified as held for sale. They are measured at the lower of
their carrying amount and fair value less cost to sell. For assets
to be classified as held for sale, they must be available for
immediate sale in their present condition and their sale must
be highly probable.
Non-current assets are not depreciated or amortised while
they are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to
be recognised.
Assets classified as held for sale are presented separately
on the face of the statement of financial position, in current
assets.
(l) Mineral exploration and evaluation
expenditure
Mineral exploration and evaluation expenditure is written off
as incurred or accumulated in respect of each identifiable
area of interest and capitalised. These costs are carried
forward only if they relate to an area of interest for which rights
of tenure are current and in respect of which:
• such costs are expected to be recouped through the
successful development and exploitation of the area of
interest, or alternatively by its sale; or
• exploration and/or evaluation activities in the area
have not reached a stage which permits a reasonable
assessment of the existence or otherwise of economically
recoverable reserves and active or significant operations
in, or in relation to, the area of interest are continuing.
In the event that an area of interest is abandoned or if the
Directors consider the expenditure to be of reduced value,
accumulated costs carried forward are written off in the
year in which that assessment is made. A regular review
is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in
relation to that area of interest.
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Notes to the Financial Statements Immediate restoration, rehabilitation and environmental
costs necessitated by exploration and evaluation activities
are expensed as incurred and treated as exploration and
evaluation expenditure. Exploration activities resulting in
future obligations in respect of restoration costs result in a
provision to be made by capitalising the estimated costs, on
a discounted cash basis, of restoration and depreciating over
the useful life of the asset. The unwinding of the effect of the
discounting on the provision is recorded as a finance cost in
the income statement.
operations. These have been incorporated in the financial
statements under the appropriate classifications.
Details of these interests are shown in Note 15.
(n) Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and usually
paid within 30 days of recognition.
Farm-in arrangements (in the exploration and
evaluation phase)
(o) Employee benefits
For exploration and evaluation asset acquisitions (farm-in
arrangements) in which the Group has made arrangements
to fund a portion of the selling partner’s (farmor’s) exploration
and/or future development expenditures (carried interests),
these expenditures are reflected in the financial statements as
and when the exploration and development work progresses.
Farm-out arrangements (in the exploration and
evaluation phase)
The Group does not record any expenditure made by the
farmee on its account. It also does not recognise any gain or
loss on its exploration and evaluation farm-out arrangements
but designates any costs previously capitalised in relation to
the whole interest as relating to the partial interest retained.
Monies received pursuant to farm-in agreements are treated
as a liability on receipt and until such time as the relevant
expenditure is incurred.
(m) Joint ventures and joint operations
Joint ventures
A joint venture is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to the
net assets of the arrangement. Investments in joint ventures
are accounted for using the equity method. Under the equity
method, the share of the profits or losses of the joint venture
is recognised in profit or loss and the share of the movements
in equity is recognised in other comprehensive income.
Investments in joint ventures are carried in the statement of
financial position at cost plus post-acquisition changes in
the Group’s share of net assets of the joint venture. Goodwill
relating to the joint venture is included in the carrying amount
of the investment and is neither amortised nor individually
tested for impairment. Income earned from joint venture
entities reduces the carrying amount of the investment.
Joint operations
A joint operation is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to
the assets, and obligations for the liabilities, relating to
the arrangement. The Group has recognised its share of
jointly held assets, liabilities, revenues and expenses of joint
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary
benefits, and annual leave expected to be settled within 12
months of the reporting date are recognised in other payables
in respect of employees’ services up to the reporting date and
are measured at the amounts expected to be paid when the
liabilities are settled.
Long service leave
The liability for long service leave is recognised in the
provision for employee benefits and measured as the present
value of expected future payments to be made in respect
of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is
given to expected future salaries, experience of employee
departures and periods of service. Expected future payments
are discounted at the corporate bond rate with terms to
maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Share based payments
Share based compensation payments are made available to
Directors and employees.
The fair value of options granted is recognised as an
employee benefit expense with a corresponding increase
in equity. The fair value is measured at grant date and
recognised over the period during which the employees
become unconditionally entitled to the options.
The fair value at grant date is independently determined
using a Black-Scholes option pricing model that takes into
account the exercise price, the term of the option, the impact
of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield
and the risk free rate for the term of the option. A discount is
applied, where appropriate, to reflect the non- marketability
and non-transferability of unlisted options, as the Black-
Scholes option pricing model does not incorporate these
factors into its valuation.
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Notes to the Financial Statements Note 1 Summary of significant
accounting policies (Continued)
The fair value of the options granted is adjusted to reflect
market vesting conditions. Non-market vesting conditions are
included in assumptions about the number of options that are
expected to become exercisable. At each balance sheet date,
the entity revises its estimate of the number of options that
are expected to become exercisable. The employee benefit
expense recognised each period takes into account the most
recent estimate.
Upon the exercise of options, the balance of the share based
payments reserve relating to those options is transferred to
share capital and the proceeds received, net of any directly
attributable transaction costs, are credited to share capital.
Upon the cancellation of options on expiry of the exercise
period, or lapsing of vesting conditions, the balance of the
share based payments reserve relating to those options is
transferred to accumulated losses.
(p) Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
(q) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the
earnings attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary
shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Receivables and payables are stated inclusive of the amount
of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is
included with other receivables or payables in the balance
sheet.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the
taxation authority, are presented as operating cash flow.
(s) Comparative figures
When required by Accounting Standards, comparative figures
have been adjusted to conform to changes in presentation for
the current financial year.
(t) Investments and other financial assets
Investments and other financial assets are initially measured
at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair
value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on
their classification.
Classification is determined based on both the business
model within which such assets are held and the contractual
cash flow characteristics of the financial asset unless, an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive
cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks
and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it’s
carrying value is written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair
value through other comprehensive income are classified as
financial assets at fair value through profit or loss. Typically,
such financial assets will be either:
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account
the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares
and the weighted average number of shares assumed to
have been issued for no consideration in relation to dilutive
potential ordinary shares.
(i) held for trading, where they are acquired for the purpose
of selling in the short-term with an intention of making a
profit, or a derivative; or
(ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit
or loss.
(r) Goods and services tax (GST)
Impairment of financial assets
Revenues, expenses and assets are recognised net of the
amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is
recognised as part of the cost of acquisition of the asset or as
a part of the expense.
The consolidated entity recognises a loss allowance
for expected credit losses on financial assets which are
either measured at amortised cost or fair value through
other comprehensive income. The measurement of the
loss allowance depends upon the consolidated entity’s
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Notes to the Financial Statements assessment at the end of each reporting period as to
whether the financial instrument’s credit risk has increased
significantly since initial recognition, based on reasonable and
supportable information that is available, without undue cost
or effort to obtain.
Where there has not been a significant increase in exposure
to credit risk since initial recognition, a 12- month expected
credit loss allowance is estimated. This represents a portion of
the asset’s lifetime expected credit losses that is attributable to
a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where
it is determined that credit risk has increased significantly,
the loss allowance is based on the asset’s lifetime expected
credit losses. The amount of expected credit loss recognised
is measured on the basis of the probability weighted present
value of anticipated cash shortfalls over the life of the
instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other
comprehensive income, the loss allowance is recognised
within other comprehensive income. In all other cases, the
loss allowance is recognised in profit or loss.
(u) Fair value estimation
A number of the Group’s accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been
determined for measurement and/or disclosure purposes
based on the following methods:
Investments in equity securities
The fair value of financial assets at fair value through profit
or loss, is determined by reference to their quoted bid
price at the reporting date. For investments with no active
market, fair value is determined using valuation techniques.
Such techniques include using recent arm’s length market
transactions, reference to the current market value of another
instrument that is substantially the same, discounted cash
flow analysis and option pricing models.
Trade and other receivables
The fair value of trade and other receivables is estimated
as the present value of future cash flows, discounted at the
market rate of interest at the reporting date.
Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value for recognition or disclosure purposes,
the fair value is based on the price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date; and assumes that the transaction will take place either:
in the principal market; or in the absence of a principal market,
in the most advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For non-
financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate
in the circumstances and for which sufficient data are available
to measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified,
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and
transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to
the fair value measurement.
For recurring and non-recurring fair value measurements,
external valuers may be used when internal expertise is either
not available or when the valuation is deemed to be significant.
External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs
applied in the latest valuation and a comparison, where
applicable, with external sources of data.
(v) Current versus non-current classification
The Group presents assets and liabilities in the statement
of financial position based on a current or non-current
classification.
An asset is current when it is:
• Expected to be realised, or intended to be sold or
consumed in the Group’s normal operating cycle;
• Expected to be realised within twelve months after the
reporting period; or
• Cash or a cash equivalents (unless restricted for at least
twelve months after the reporting period.
A liability is current when it is:
• Expected to be settled in the Group’s normal operating
cycle;
•
It is due to be settled within twelve months after the
reporting date; or
• There is no unconditional right to defer the settlement of
the liability for at least twelve months after the reporting
period.
All other assets and liabilities are classed as non-current.
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Notes to the Financial Statements Note 2 Financial risk management
(c) Market risk
Market risk is the risk that changes in market prices, such
as foreign exchange rates, interest rates and equity prices
will affect the Group’s income or the value of its holdings
of financial instruments. The objective of market risk
management is to manage and control market risk exposures
within acceptable parameters, while optimising any return.
Interest rate risk
The Group has significant cash assets which may be
susceptible to fluctuations in changes in interest rates. Whilst
the Group requires the cash assets to be sufficiently liquid to
cover any planned or unforeseen future expenditure, which
prevents the cash assets being committed to long term fixed
interest arrangements; the Group does mitigate potential
interest rate risk by entering into short to medium term fixed
interest investments.
Equity risk
The Group has exposure to price risk in respect of its holding
of ordinary securities in Hampton Hill NL, which has a carrying
value at 30 June 2023 of $59,342 (2022: $118,861). The
investment is classified at fair value through profit or loss
and as such any movement in the value of Hampton Hill NL
shares will be recognised as a benefit of expense in profit or
loss. No specific hedging activities are undertaken into this
investment.
Foreign exchange risk
The Group enters into earn-in arrangements that may be
denominated in currencies other than Australian Dollars.
Whilst the Group does not recognise assets or liabilities
in respect of these earn-in arrangements and accordingly
fluctuations in foreign exchange rates will have no direct
impact on the Group’s net assets, movements in foreign
exchange may favourably or adversely affect future amounts
to be incurred by the Group or its earn-in partners pursuant to
such agreements.
Other than the above, the Group does not have any direct
contact with foreign exchange fluctuations other than their
effect on the general economy.
The Group has exposure to a variety of risks arising from its
use of financial instruments. This note presents information
about the Company’s exposure to the specific risks, and the
policies and processes for measuring and managing those
risks. The Board of Directors has the overall responsibility
for the risk management framework and has adopted a Risk
Management Policy.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from
transactions with customers and investments.
Trade and other receivables
The nature of the business activity of the Group does not
result in trading receivables. The receivables that the Group
does experience through its normal course of business are
short term and the most significant recurring by quantity is
receivable from the Australian Taxation Office, the risk of non-
recovery of receivables from this source is considered to be
negligible.
Cash deposits
The Directors believe any risk associated with the use of
predominantly only one bank is addressed through the use
of at least an A-rated bank as a primary banker and by the
holding of a portion of funds on deposit with alternative
A-rated institutions. Except for this matter the Group currently
has no significant concentrations of credit risk.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet
its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s
reputation.
The Group manages its liquidity risk by monitoring its cash
reserves and forecast spending. Management is cognisant of
the future demands for liquid finance resources to finance the
Company’s current and future operations, and consideration
is given to the liquid assets available to the Company before
commitment is made to future expenditure or investment.
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Notes to the Financial Statements Note 3 Critical accounting
estimates and judgements
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that may have a financial
impact on the Group and that are believed to be reasonable
under the circumstances. The judgements estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below:
Accounting for capitalised exploration and
evaluation expenditure
The Group’s accounting policy is stated at 1(l). There is some
subjectivity involved in the carrying forward as capitalised
or writing off to the income statement exploration and
evaluation expenditure. Key judgements applied include
determining which expenditures relate directly to exploration
and evaluation activities and allocating overheads between
those that are expensed and capitalised. Management give
due consideration to areas of interest on a regular basis and
are confident that decisions to either write off or carry forward
such expenditure reflect fairly the prevailing situation.
Accounting for share based payments
The values of amounts recognised in respect of share based
payments have been estimated based on the fair value of
the equity instruments granted. Fair values of options issued
are estimated by using an appropriate option pricing model.
There are many variables and assumptions used as inputs into
the models. If any of these assumptions or estimates were to
change this could have a significant effect on the amounts
recognised. See note 20 for details of inputs into option pricing
models in respect of options issued during the reporting period.
Note 4 Segment information
The Group has identified its operating segments based on
the internal reports that are reviewed and used by the board
of directors in assessing performance and determining the
allocation of resources. Reportable segments disclosed
are based on aggregating operating segments, where the
segments have similar characteristics. The Group’s sole activity
is mineral exploration and resource development wholly within
Australia, therefore it has aggregated all operating segments
into the one reportable segment being mineral exploration.
The reportable segment is represented by the primary
statements forming these financial statements.
Note 5 Other income
Operating activities
Tenement option fee income
Recharged costs
Management fees from farm-in and project generation alliance partners
Other income
Consolidated
2023
$
30,000
67,840
135
66,150
164,125
2022
$
25,000
111,397
6,586
36,320
179,303
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Notes to the Financial Statements Note 6 Loss for the year
Loss before income tax includes the following specific
benefits/(expenses):
Depreciation and amortisation:
Office equipment
Right of use assets – leases
Depreciation included in exploration costs:
Field equipment
Total exploration and joint venture costs not capitalised and written off
Superannuation expense – defined contribution
(Loss)/Gain in fair value of financial assets1
Note
12
13
12
14
Consolidated
2023
$
2022
$
(8,330)
(65,436)
(73,766)
(18,007)
(236,762)
(113,186)
(59,519)
(3,206)
(65,436)
(68,642)
(18,572)
(4,204,574)
(102,663)
(447,700)
1 Adjustment to carrying value of investment in Hampton Hill NL, based on the Company’s share of net assets as at 30 June 2023. The gain/(loss) on investment has been
recognised in the Statement of Profit or Loss. Refer note 11.
Note 7 Income tax
a) Income tax expense
Current income tax:
Current income tax charge (benefit)
Current income tax not recognised
Deferred income tax:
Relating to origination and reversal of timing differences
Deferred income tax benefit/(liability) not recognised
Income tax expense/(benefit) reported in the income statement
Consolidated
2023
$
2022
$
(1,174,514)
1,174,514
(1,000,415)
1,000,415
(332,004)
332,004
-
(742,209)
742,209
-
50 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements b) Reconciliation of income tax expense to prima facie tax
payable
Profit/(Loss) from continuing operations before income tax expense
Tax at the Australian rate of 25% (2021 – 26%)
Tax effect of permanent differences:
Non-deductible share-based payment
Unrealised movement in fair value of financial assets
Exploration costs written off
Capital raising costs claimed
Gain recognised on demerger
Net deferred tax asset benefit not brought to account
Tax (benefit)/expense
c) Deferred tax – Balance Sheet
Liabilities
Prepaid expenses
Capitalised exploration expenditure
Assets
Consolidated
2023
$
2022
$
(1,429,900)
(357,475)
115,186
14,880
23,634
(60,818)
4,428,194
1,107,049
94,961
111,925
1,051,144
(26,154)
-
(2,526,212)
264,593
187,288
-
-
(45,462)
(4,445,772)
(4,491,234)
(3,370)
(3,472,853)
(3,476,223)
Revenue losses available to offset against future taxable income
10,582,393
9,430,935
Employee provisions
Accrued expenses
Deductible equity raising costs
Net deferred tax asset not recognised
66,917
53,769
197,588
10,900,667
6,409,433
56,256
2,791
63,670
9,553,652
6,077,429
50 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 7 Income tax (Continued)
Note
Consolidated
2023
$
2022
$
d) Deferred tax – Income Statement
Liabilities
Prepaid expenses
Exploration assets reclassified as held for sale
Capitalised exploration expenditure
Assets
Deductible equity raising costs
Accruals
Increase/(decrease) in tax losses carried forward
Employee provisions
Deferred tax benefit/(expense) movement for the period not recognised
7a
(42,092)
-
(972,919)
133,918
50,978
1,151,458
10,661
332,004
15,554
35,265
482,345
(28,772)
(10,642)
273,055
(24,596)
742,209
The deferred tax benefit of tax losses not brought to account will only be obtained if:
(i) The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the tax losses
to be realised;
(ii) The Company continues to comply with the conditions for deductibility imposed by tax legislation; and
(iii) No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses.
All unused tax losses were incurred by Australian entities.
Note 8 Current assets – Cash and cash equivalents
Cash at bank and on hand
Term Deposits
Consolidated
2023
$
317,728
11,500,000
11,817,728
2022
$
665,945
1,500,000
2,165,945
(a) Reconciliation to cash at the end of the year
The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows:
Cash and cash equivalents per statement of cash flows
11,817,728
2,165,945
(b) Term Deposits
Amounts classified as term deposits are short term deposits able to be converted into cash within three months or less, and earn
interest at the respective short term interest rates.
52 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements (c) Cash balances not available for use
Included in cash and cash equivalents above are amounts pledged as guarantees for the following:
Office lease bond guarantee
Note
26
Consolidated
2023
2022
$
-
$
-
The security deposit in relation to the Group’s lease on its office at 1 Alvan Street, Subiaco, Western Australia of $25,652 is
included in non-current assets. An amount of $50,000 held on deposit in relation to the Group’s corporate credit card facility is
included in non-current assets.
The Company recognises liabilities in the financial statements for unspent farm-in contributions.
Note 9 Current assets – Receivables
a) Trade and other receivables
Deposits paid
Funds due from project generation and farm-in partners
Trade and other receivables
GST recoverable
b) Other current assets
Prepaid tenement costs
Details of fair value and exposure to interest risk are included at note 22.
Consolidated
2023
$
11,885
-
7,324
75,263
94,472
181,846
181,846
2022
$
-
8,193
236,162
-
244,355
13,479
13,479
52 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 10 Non-current assets – Investment in controlled entities
a) Investment in controlled entities
The following amounts represent the respective investments in the share capital of Encounter Resources Limited’s wholly
owned subsidiary companies at 30 June 2023:
2023
2022
Encounter Operations Pty Ltd
Encounter Yeneena Pty Ltd
Baudin Resources Pty Ltd
Encounter Paterson Pty Ltd
Encounter Aileron Pty Ltd
Subsidiary Company
Encounter Operations Pty Ltd
Encounter Yeneena Pty Ltd
Baudin Resources Pty Ltd
Encounter Paterson Pty Ltd
Encounter Aileron Pty Ltd
$
2
2
10
1
1
$
2
2
10
1
1
Country of
Incorporation
Ownership Interest
2023
2022
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
• Encounter Operations Pty Ltd was incorporated in Western Australia on 27 November 2006.
• Encounter Yeneena Pty Ltd was incorporated in Western Australia on 23 May 2013.
• Baudin Resources Pty Ltd was incorporated in Western Australia on 7 April 2017.
• Encounter Paterson Pty Ltd was incorporated in Western Australia on 9 July 2021.
• Encounter Aileron Pty Ltd was incorporated in Western Australia on 9 July 2021.
The ultimate controlling party of the group is Encounter Resources Limited.
During the prior financial year the Company completed the demerger of the Hamelin Gold Limited group which comprised
Hamelin Gold Limited and its subsidiaries Hamelin Resources Pty Ltd and Hamelin Tanami Pty Ltd (note 33).
54 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements b) Loans to controlled entities
The following amounts are payable to the parent company, Encounter Resources Limited at the reporting date:
Encounter Operations Pty Ltd
Encounter Yeneena Pty Ltd
Baudin Resources Pty Ltd
Encounter Paterson Pty Ltd
Encounter Aileron Pty Ltd
2023
$
2022
$
22,314,516
22,310,706
888,882
1,561,381
7,456,964
3,623,897
881,285
1,000,240
6,865,391
713,260
The loans to Encounter Operations Pty Ltd, Encounter Paterson Pty Ltd, Encounter Aileron Pty Ltd, Encounter Yeneena Pty
Ltd and Baudin Resources Pty Ltd, to fund exploration activity are non-interest bearing. The Directors of Encounter Resources
Limited do not intend to call for repayment within 12 months.
Note 11 Financial assets – Investments Designated at Fair Value
through Profit or Loss
Balance at the start of the financial year1
Gain on investments recognised through profit & loss2
Balance at the end of the financial year
Consolidated
2023
$
118,861
(59,519)
59,342
2022
$
566,561
(447,700)
118,861
1 The investment relates to the shares received from Hampton Hill NL in relation to an option fee pursuant to an election made under an earn-in agreement in respect of
the Company’s Millennium project.
2 Adjustment to carrying value of investment in Hampton Hill NL, based on the Company’s share of net assets. The (loss)/gain on investment has been recognised in the
Statement of Profit or Loss. Refer note 6.
Investments designated at fair value through profit or loss have been measured at level 3 in the fair value measurement
hierarchy, refer accounting policy 1(u).
Note 12 Non-current assets – Property, plant and equipment
Field equipment
At cost
Accumulated depreciation
Office equipment
At cost
Accumulated depreciation
Consolidated
2023
$
2022
$
863,889
(786,083)
77,806
67,933
(53,339)
14,594
92,400
805,219
(768,076)
37,143
52,076
(45,009)
7,067
44,210
2 0 2 3 A N N U A L R E P O R T
55
54 E N C O U N T E R R E S O U R C E S L I M I T E D
Notes to the Financial Statements
Note 12 Non-current assets – Property, plant and equipment (Continued)
Reconciliation
Field equipment
Net book value at start of the year
Cost of additions
Depreciation charged (note 6)
Net book value at end of the year
Office equipment
Net book value at start of the year
Cost of additions
Depreciation charged
Net book value at end of the year
Note
6
Consolidated
2023
$
2022
$
37,143
58,670
(18,007)
77,806
7,067
15,857
(8,330)
14,594
55,715
-
(18,572)
37,143
8,523
1,750
(3,206)
7,067
No items of property, plant and equipment have been pledged as security by the Group.
Note 13 Non-current assets – Right of use assets - leases
Leases
Carrying value at start of the year
ROU assets recognised in the year
Amortisation charged
Carrying value at end of the year
Note
6
Consolidated
2023
$
2022
$
109,057
174,493
-
(65,436)
43,621
-
(65,436)
109,057
A right of use asset has been recognised in respect of the Group’s lease of its office at Suite 2, 1 Alvan Street, Subiaco, Western
Australia. The lease is for a term of three years commencing 1 March 2021 with an option to extend for three further years.
Management have determined that based on all available information, it is not reasonably certain that they will exercise the
option to renew the lease at the end of the initial three-year term.
Refer to Note 18 for details of the corresponding right of use liability arising from the abovementioned lease.
56 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 14 Non-current assets – Capitalised mineral exploration and
evaluation expenditure
Note
Consolidated
2023
$
2022
$
In the exploration and evaluation phase
Capitalised exploration costs at the start of the period
Total acquisition and exploration costs for the period (i)
Exploration costs funded by EIS grant
Research and development tax credits (ii)
Total exploration and joint venture costs written off and expensed for
the period
6
13,891,414
15,212,300
4,490,490
(295,934)
(66,118)
(236,762)
3,049,732
(152,295)
(13,749)
(4,204,574)
Capitalised exploration costs at the end of the period
17,783,090
13,891,414
The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful development
and commercial exploitation, or alternatively, sale of the respective areas of interest.
The capitalised exploration expenditure written off includes expenditure written off on surrender of or intended surrender of
tenements for both the group entities and the Group’s proportionate share of the exploration written off by the joint venture
entities.
(i) Does not include costs incurred by farm-in partners in respect of spend incurred on assets the subject of farm-in arrangements.
(ii) Amounts receivable pursuant to research and development tax credit (R&D) claims lodged during the period. The activities the subject of the R&D claims are subject to
review by AusIndustry prior to being submitted. R&D submissions may or may not be subject to future review or audit by AusIndustry or the Australian Taxation Office.
56 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 15 Interest in joint ventures
and farm-in arrangements
formed and the parties must contribute funds based on their
pro-rata interest or dilute according to a standard dilution
formula. Should a party’s interest dilute to below 10%, that
party’s interest shall automatically convert to a net smelter
return royalty.
a) Joint Venture Agreements – Joint Operations
• During the farm-in phase, South32 will be the Manager of
Joint venture agreements may be entered into with third
parties.
Assets employed by these joint ventures and the Group’s
expenditure in respect of them is brought to account initially
as capitalised exploration and evaluation expenditure until
a formal joint venture agreement is entered into. Thereafter,
investment in joint ventures is recorded distinctly from
capitalised exploration costs incurred on the company’s 100%
owned projects.
b) Joint Venture and Farm-in Arrangements
Earn-in and Joint Venture Agreement – Jessica
Copper Project (“Jessica”) and Carrara Copper-
Zinc Project (“Carrara”) – South32 Ltd (South32)
The key terms for the farm-in and joint venture agreements
are:
Jessica
• South32 has the right to earn a 60% interest in Jessica (the
“Initial Interest”) by sole funding $15 million of exploration
expenditure within 10 years.
• During the farm-in phase or joint venture period, South32
may earn an additional 15% interest in Jessica (the
“Further Interest”) by completing a Scoping Study.
the project.
During the farm-in phase for both projects, a technical
committee comprising representatives from each of Encounter
and South32 will review and approve annual exploration
programs and budgets. All decisions of the technical committee
will be decided by majority vote, with South32 having a casting
vote.
Scoping Study means an order of magnitude technical and
economic study of the potential viability of JORC Mineral
Resources for the relevant project.
Earn-in and Joint Venture Agreement - Yeneena
Copper-Cobalt Project (“Yeneena”) – IGO Limited
(IGO)
The key terms of the earn-in and joint venture agreement are as
follows:
•
IGO may earn a 70% interest in the project by sole funding
$15 million of expenditure over 7 years;
• During the earn-in, IGO shall have the right to be the
Manager of the project;
• Upon IGO completing the earn-in a 70:30 joint venture will
be formed, and the parties must contribute funds based
on their percentage interest to maintain their respective
interests; and
• Upon South32 earning the Initial Interest or Further
• Standard dilution clauses will apply to the parties’ interests.
Interest in Jessica, a 60:40 or 75:25 joint venture will be
formed and in the case of South32 earning the Further
Interest, the parties must contribute funds based on their
pro-rata interest or dilute according to a standard dilution
formula. Should a party’s interest dilute to below 10%, that
party’s interest shall automatically convert to a net smelter
return royalty.
• During the farm-in phase, South32 will be the Manager of
the project.
Carrara
• South32 has the right to earn a 60% interest in Carrara by
sole funding $10 million of exploration expenditure within
10 years.
• During the farm-in phase or joint venture period, South32
may earn an additional 15% interest in Carrara by
completing a Scoping Study.
• Upon South32 earning the Initial Interest or the Further
Interest in Carrara, a 60:40 or 75:25 joint venture will be
Should a party’s interest dilute to below 10% it shall
automatically convert to a Net Smelter Royalty.
Earn-in and Joint Venture Agreement – Elliott Copper
Project (“Elliott”) – BHP Group Ltd (BHP)
The key terms for the farm-in and joint venture agreement are:
• Staged farm-in where BHP has the right to earn up to a
75% interest in Elliott by sole funding up to A$25 million of
exploration expenditure within 10 years.
• Upon BHP completing the earn-in, a 75:25 joint venture will
be formed and the parties must contribute funds based
on their percentage interest to maintain their respective
interests or dilute according to a standard dilution formula.
Should a party’s interest dilute to below 10% it shall
automatically convert to a net smelter royalty.
• During the farm-in phase, BHP has the right to be the
Manager of the project.
58 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 16 Current liabilities – Trade and other payables
Trade payables and accruals
Other payables
Consolidated
2023
$
945,595
42,206
987,801
2022
$
98,017
30,098
128,115
Liabilities are not secured over the assets of the Group. Details of fair value and exposure to interest risk are included at note 22.
Note 17 Current liabilities – Employee benefits
Liability for annual leave
Liability for long service leave
Note 18 Current liabilities – Lease liabilities
Leases
Carrying value at start of the year
Lease liabilities recognised in the year
Lease payments made
Lease interest charged to profit or loss
Carrying value at end of the year
Consolidated
2023
$
101,183
166,485
267,668
2022
$
79,992
145,032
225,024
Consolidated
2023
$
2022
$
116,954
177,423
-
(74,823)
6,928
49,059
-
(72,497)
12,028
116,954
58 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 18 Current liabilities – Lease liabilities (Continued)
Lease liabilities are split between current and non-current liabilities at the balance date as follows:
Lease liabilities due < 1 year
Lease liabilities due > 1 year
Total Lease liabilities
Consolidated
2023
$
49,059
-
49,059
2022
$
67,713
49,241
116,954
A lease liability has been recognised in respect of the Group’s lease of its office at Suite 2, 1 Alvan Street, Subiaco, Western
Australia.
Refer to Note 13 for details of the corresponding right of use asset arising from the abovementioned lease.
Refer to Note 22 for details of contractual maturity of the lease liability.
Note 19 Issued capital
a) Ordinary shares
The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia. The
Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares
respectively held by them.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in
person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
Ordinary shares have no par value. There is no limit to the authorised share capital of the Company.
Note
Issue
price
2023
No.
2022
No.
2023
$
2022
$
b) Share capital
Issued share capital
c) Share movements during the year
Balance at the start of the financial year
Exercise of options1
Exercise of options1
Exercise of options1
Exercise of options1
Capital reduction – in-specie distribution
33
395,525,781
317,216,826
55,158,969
41,666,888
317,216,826
316,256,523
41,666,888
50,000,566
$0.10
$0.105
$0.137
$0.062
75,000
425,000
60,303
400,000
-
-
-
-
-
-
-
-
-
7,500
44,625
8,262
24,800
(8,415,115)
Share placement
Exercise of options1
Share placement
Less share issue costs:
Cash-based
Equity-based
$0.12
35,833,334
$0.052
2,475,621
$0.25
40,000,000
20
-
-
-
-
-
-
-
4,300,000
128,732
10,000,000
-
-
-
(778,945)
(157,707)
(3,750)
-
Balance at the end of the financial year
395,525,781
317,216,826
55,158,968
41,666,888
1 Refer Note 20 for details of options exercised.
60 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Capital risk management
The Company’s objectives when managing capital is to
safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other
stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the
statement of financial position, plus net debt (where
applicable). Net debt is calculated as total borrowings less
cash and cash equivalents. In order to maintain or adjust the
capital structure, the company may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
The Company may seek to raise capital to fund its exploration
and evaluation programs, invest in project generation or
acquisition and to fund the corporate and administrative costs
that support such activities.
The capital risk management policy remains unchanged from
the 30 June 2022 Annual Report.
Note 20 Options and share based
payments
The establishment of the Encounter Resources Limited
Employee Share Option Plan (“the Plan”) was last approved
by a resolution at the Annual General Meeting of shareholders
of the Company on 26 November 2021. All eligible Directors,
executive officers and employees of Encounter Resources
Limited who have been continuously employed by the
Company are eligible to participate in the Plan. The Plan
allows the Company to issue free options to eligible persons.
The options can be granted free of charge and are exercisable
at a fixed price in accordance with the Plan.
a) Options issued during the year
Number of
options exercised
Details of
options exercised
2,900,000
Exercisable at $0.052 expiring
30 November 2022
1
Included in options exercised above is an amount of 424,379 options
foregone in consideration given on exercise (2022: 689,697).
c) Options cancelled during the year
During the year nil options (2022: 400,000) were cancelled
upon termination of employment; and nil options (2022:
1,500,000) were cancelled on expiry of the exercise period.
d) Options on issue at the balance date
The number of options outstanding over unissued ordinary
shares at 30 June 2023 is 22,810,000 (2022: 18,180,000). The
terms of these options are as follows:
Number
of options
outstanding
1,500,000
5,050,000
Exercise price
Expiry date
8.2 cents
30 November 2023
16.2 cents
31 October 2023
650,000
18.2 cents
30 June 2024
2,450,000
22.2 cents
26 November 2024
800,000
21.2 cents
30 April 2025
3,630,000
1,200,000
1,000,000
1,000,000
3,980,000
250,000
500,000
100,000
500,000
200,000
22,810,000
22.4 cents
28 November 2025
19.0 cents
28 June 2026
20.0 cents
29 September 2025
30.0 cents
29 September 2025
26.8 cents
30 November 2026
28.3 cents
15 January 2027
20.8 cents
28 February 2027
17.5 cents
27 March 2027
50.0 cents
29 May 2026
36.8 cents
20 June 2027
During the financial year the Company granted 7,530,000
options (2022: 5,030,000) over unissued shares.
e) Subsequent to the balance date
b) Options exercised during the year
During the financial year the Company issued shares on the
exercise of 2,900,000 (2022: 1,650,000) unlisted options, as
follows:
1,200,000 (2022: nil) options have been granted subsequent
to the balance date and to the date of signing this report.
Nil options have been exercised subsequent to the balance
date to the date of signing this report.
Subsequent to the balance date nil options have been
cancelled on expiry of the exercise period.
Weighted average contractual life
The weighted average contractual life for un-exercised
options is 23.3 months (2022: 24.3 months).
Basis and assumptions used in the valuation of options.
The options issued during the year were valued using the
Black-Scholes option valuation methodology.
60 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 20 Options and share based payments (Continued)
Issued as equity-based remuneration:
Date granted
1 Dec 2022
16 Jan 2023
1 Mar 2023
28 Mar 2023
21 Jun 2023
Number
of options
granted
3,980,000
250,000
500,000
100,000
200,000
Exercise
price
(cents)
26.8
28.3
20.8
17.5
36.8
Expiry date
30 Nov 2026
15 Jan 2027
28 Feb 2027
27 Mar 2027
20 Jun 2027
Issued as equity-based compensation for capital raising services provided:
Date granted
29 Sep 2022
29 Sep 2022
29 May 2023
Number
of options
granted
1,000,000
1,000,000
500,000
Exercise
price
(cents)
20.0
30.0
50.0
Expiry date
29 Sep 2025
29 Sep 2025
29 May 2026
1 Historical volatility has been used as the basis for determining expected share price volatility.
Risk free
interest rate
used
3.28%
3.32%
3.67%
2.91%
3.92%
Risk free
interest rate
used
3.73%
3.73%
3.43%
Volatility
applied1
79.29%
79.50%
82.67%
83.78%
91.40%
Volatility
applied1
75.40%
75.40%
93.34%
Value of
Options
$363,857
$24,247
$37,300
$6,296
$29,045
$460,745
Value of
Options
$50,511
$37,934
$69,262
$157,707
Reconciliation of movement of options over unissued shares during the period including weighted
average exercise price (WAEP)
2023
2022
No.
WAEP (cents).
$
WAEP (cents)
Options granted during the year
Options exercised during the year1
Options cancelled and expired unex-ercised during
the year
Options outstanding at the end of the year
18,180,000
7,530,000
(2,900,000)
-
22,810,000
16.3
27.7
5.2
-
21.5
16,700,000
5,030,000
(1,650,000)
(1,900,000)
18,180,000
18.2
21.6
10.9
22.6
16.3
1
Included in options exercised above is an amount of 689,697 options foregone in consideration given on exercise (2022: 689,697).
62 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 21 Reserves and accumulated losses
Consolidated
2023
2022
Accumulated
losses
Equity
remuneration
reserve1
Accumulated
losses
Equity
remuneration
reserve (i)
$
$
$
$
Balance at the beginning of the year
(26,698,304)
1,224,339
(29,535,096)
1,041,896
Profit/(Loss) for the period
(1,429,900)
Derecognition of reserves on de-merger of
subsidiary
Capital return on in-specie distribu-tion
Movement in equity remuneration reserve in respect
of options issued (note 20)
Transfer to accumulated losses on cancellation of
options
-
-
-
4,428,194
294,156
(2,074,698)
-
-
-
618,452
-
379,845
-
-
-
25,048
(25,048)
189,140
(189,140)
Transfer to share capital on exer-cise of options2
-
(29,932)
-
(8,262)
Balance at the end of the year
(28,103,156)
1,787,811
(26,698,304)
1,224,339
1 The equity remuneration reserve is used to recognise the fair value of options issued and vested but not exercised.
2 Transfer to issued capital in respect of the deemed exercise price receivable on the exercise of options pursuant to cash less exercise provisions
62 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 22 Financial instruments
Credit risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level of credit risk,
and as such no disclosures are made, note 2(a).
Impairment losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting date. No
impairment expense or reversal of impairment charge has occurred during the reporting period, other than the write off of
deferred exploration assets at note 14.
Interest rate risk
At the reporting date the interest profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Financial assets
Variable rate instruments
Financial assets1
1
Cash and cash equivalents.
Carrying amount ($)
2023
2022
$
-
$
-
11,817,728
2,165,945
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by
the amounts shown below. This analysis assumes that all other variables remain constant.
2023
Profit or loss
Equity
1% increase
1% decrease
1% increase
1% decrease
$
$
$
$
Variable rate instruments
118,177
(118,177)
118,177
(118,177)
2022
Profit or loss
Equity
1% increase
1% decrease
1% increase
1% decrease
$
$
$
$
Variable rate instruments
21,659
(21,659)
21,659
(21,659)
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Notes to the Financial Statements Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements, note 2(b):
2023
Carrying
amount
Contractual
cash flows
< 6 months
6-12 months
$
$
$
$
1-2
years
$
2-5
years
$
> 5
years
$
Consolidated
Trade and other payables
987,801
987,801
987,801
Lease liabilities
49,059
49,059
49,059
1,036,860
1,036,860
1,036,860
-
-
-
Consolidated
2022
Carrying
amount
Contractual
cash flows
< 6 months
6-12 months
$
$
$
$
1-2
years
$
Trade and other payables
128,115
128,115
128,115
Lease liabilities
116,954
116,954
32,822
245,069
245,069
160,937
-
34,891
34,891
Fair values
Fair values versus carrying amounts
-
-
-
-
49,241
49,241
-
-
-
-
-
-
-
-
-
-
-
-
> 5
years
$
2-5
years
$
The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet are as follows:
Consolidated
2023
2022
Carrying amount
Fair value
Carrying amount
Fair value
$
$
$
$
Cash and cash equivalents
11,817,728
11,817,728
Financial assets
Lease liabilities
59,342
(49,059)
59,342
(49,059)
Trade and other payables
(987,801)
(987,801)
2,165,945
118,861
(116,954)
(128,115)
10,840,210
10,840,210
2,0239,737
2,165,945
118,861
(116,954)
(128,115)
2,039,737
The Group’s policy for recognition of fair values is disclosed at note 1(u).
Note 23 Dividends
No dividends were paid or proposed during the financial year ended 30 June 2023 or 30 June 2022.
The Company has no franking credits available as at 30 June 2023 or 30 June 2022.
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Notes to the Financial Statements Note 24 Key management personnel disclosures
(a) Directors and key management personnel
The following persons were directors of Encounter Resources Limited during the financial year:
(i) Chairman – non-executive
Paul Chapman
(ii) Executive directors
Will Robinson, Managing Director
(iii) Non-executive directors
Jonathan Hronsky, Director
Philip Crutchfield, Director
Peter Bewick, Director (from 1 November 2021)
There were no other persons employed by or contracted to the Company during the financial year, having responsibility for
planning, directing and controlling the activities of the Company, either directly or indirectly
(b) Key management personnel compensation
A summary of total compensation paid to key management personnel during the year is as follows:
Total short-term employment benefits
Total share-based payments
Total post-employment benefits
2023
$
506,301
363,857
45,649
915,807
2022
$
443,333
163,259
44,333
650,925
During the year the Group incurred costs of $14,490 (2022: $17,842), for geological consulting services from Western Mining
Services, an entity associated with Dr Jon Hronsky.
Note 25 Remuneration of auditors
Audit and review of the Company’s financial statements
37,000
33,050
Consolidated
2023
$
2022
$
66 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements
Note 26 Contingencies
Bank guarantees
ANZ Bank has provided an unconditional bank guarantee
amounting to $25,652 in relation to the lease over the
Company’s office premises at Suite 2, 1 Alvan Street, Subiaco,
Western Australia.
A bank guarantee exists, and a corresponding amount of
$50,000 held on deposit, in relation to the Group’s corporate
credit card facility.
These amounts are not reported as a cash asset in these
financial statements, and are classified within bonds in non-
current assets.
(ii) Contingent assets
There were no material contingent assets as at 30 June 2023
or 30 June 2022.
Note 27 Commitments
(a) Exploration
The Group has certain obligations to perform minimum
exploration work on mineral leases held. These obligations
may be varied as a result of renegotiations of the terms of the
exploration licences or their relinquishment. The minimum
exploration obligations are less than the normal level of
exploration expected to be undertaken by the Group.
As at balance date, total exploration expenditure
commitments on tenements held by the Group have not been
provided for in the financial statements and which cover the
following twelve-month period amount to $2,490,520 (2022:
$2,305,520).
The exploration expenditure obligations stated above include
amounts (approximately $1.4m (2022: approximately $1.2m))
that are funded by third parties pursuant to various farm-
in agreements (Note 15). Therefore current expenditure
commitment on Encounter 100% owned projects is
approximately $1.1m (2022: approximately $1.1m).
(c) Contractual Commitment
There are no material contractual commitments as at 30
June 2023 or 30 June 2022 not otherwise disclosed in the
Financial Statements.
(i) Contingent liabilities
There were no material contingent liabilities not provided for
in the financial statements of the Group as at 30 June 2023 or
30 June 2022 other than:
Yeneena Project Gold Claw-back
Included in the agreement for the Group’s acquisition
of the remaining 25% interest of certain licences in the
Yeneena Project is a gold claw-back right in the event of a
major discovery of a deposit of minerals dominant in gold,
with gold revenue measured in a mining study equal to or
exceeding 65% of total revenue and where a JORC compliant
mineral resources exceeds 4,000,000 ounces of gold or
gold equivalent, or is capable of producing at least 200,000
ounces of gold or gold equivalent per year for 10 years.
Under the agreement Barrick (Australia Pacific) Limited retains
the right to regain an interest of between 70 and 100% in the
gold discovery at a price of between US$40-100 per ounce,
with a 1.5% net smelter royalty to Encounter Resources.
The Yeneena Project Gold Claw-back relates to the following
exploration licences: E45/2500, E45/2501, E45/2502,
E45/2561, E45/2657, E45/2658, E45/2805 and E45/2806.
Lamil Production Royalty
The Group is subject to a production unit royalty of $1 per dry
metric tonne of ore mined and sold from licence E45/4613 at
its Lamil Copper-Gold Project.
Native Title and Aboriginal Heritage
The Group has Land Access and Mineral Exploration
Agreements with Western Desert Lands Aboriginal
Corporation in relation to the tenements comprising the
Yeneena Base Metals Project and the Paterson Gold Projects.
Western Desert Lands Aboriginal Corporation ((Jamukurnu-
Yapalikunu/WDLAC) is the Prescribed Body Corporate for the
Martu People of the Central Western Desert region in Western
Australia.
The Company has entered into the Mineral Exploration and
Land Access Deed of Agreement with the Parna Ngururrpa
(Aboriginal Corporation) RNTBC in relation to the Aileron
project in the West Arunta in Western Australia.
Native title claims have been made with respect to areas
which include tenements in which the Group has an interest.
The Group is unable to determine the prospects for success
or otherwise of the claims and, in any event, whether or
not and to what extent the claims may significantly affect
the Group or its projects. Agreement is being or has been
reached with various native title claimants in relation to
Aboriginal Heritage issues regarding certain areas in which
the Group has an interest.
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Notes to the Financial Statements Note 28 Related party
transactions
Note 29 Events occurring after the
balance sheet date
Transactions with Directors during the year are disclosed at
Note 24 – Key Management Personnel.
In addition, the Company incurred costs of $3,900 (2022: $nil)
with Western Mining Services, an entity associated with Dr
Jon Hronsky, in relation to the attendance of training courses
by employees of the Company.
There are no other related party transactions other than as
stated in the financial statements.
Subsequent to the end of the financial period the Company
has issued a total of 1,200,000 unlisted options to employees
pursuant to the terms of the Company’s Employee and Share
Option Plan.
Other than as already stated in this report, there has not arisen
in the interval between the end of the financial year and the
date of this report any item, transaction or event of a material
and unusual nature likely, in the opinion of the Directors of the
Company to affect substantially the operations of the Group,
the results of those operations or the state of affairs of the
Group in subsequent financial years.
Note 30 Reconciliation of loss after tax to net cash inflow from
operating activities
Profit/(Loss) from ordinary activities after income tax
Gain on demerger
Depreciation and amortisation
Exploration cost written off and expensed
Share based payments expense
Unrealised (gain)/loss on investments
Contribution to overheads from farm-in and project alliance partners
Lease interest
Movement in assets and liabilities:
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash outflow from operating activities
Consolidated
2023
$
2022
$
(1,429,900)
4,428,194
-
(10,104,846)
73,766
236,762
460,745
59,519
(135)
6,928
(9,633)
30,506
(571,442)
68,642
4,093,178
379,845
447,700
(6,586)
12,028
(3,921)
(29,556)
(715,322)
Non-Cash Investing and Financing Activities
During the year the Company issued options to lead managers to capital raising services provided, with a total fair value
amounting to $157,707 (refer note 20).
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Notes to the Financial Statements Note 31 Earnings per share
a) Basic earnings per share
Profit/(Loss) attributable to ordinary equity holders of the Company
b) Diluted earnings per share
Profit/(Loss) attributable to ordinary equity holders of the Company
Consolidated
2023
Cents
(0.4)
(0.4)
$
2022
Cents
1.4
1.4
$
c) Loss used in calculation of basic and diluted loss per share
Consolidated profit/(loss) after tax from continuing operations
(1,429,900)
4,428,194
d) Weighted average number of shares used as the
denominator
Weighted average number of shares used as the denominator in
calculating basic earnings per share
No.
No.
349,011,344
316,715,223
Weighted average number of shares used as the denominator in
calculating basic earnings per share
349,011,344
321,115,223
68 E N C O U N T E R R E S O U R C E S L I M I T E D
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Notes to the Financial Statements Note 32 Parent entity information
Financial position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
NET ASSETS
Equity
Issued capital
Equity remuneration reserve
Accumulated losses
TOTAL EQUITY
Financial performance
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income
Company
2023
$
2022
$
12,018,264
18,163,514
30,181,778
1,338,155
-
1,338,155
28,843,623
55,158,968
1,787,811
2,423,579
14,260,399
16,683,978
441,814
49,241
491,055
16,192,923
41,666,888
1,224,339
(28,103,156)
(26,698,304)
28,843,623
16,192,923
(1,429,900)
8,555,175
-
-
(1,429,900)
8,555,175
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
No guarantees have been entered into by the parent entity in relation to the debts of its subsidiary companies.
Contingent liabilities
For full details of contingencies see Note 26.
Commitments
For full details of commitments see Note 27.
Note 33 Demerger of Hamelin Gold Limited
During the comparative period the Company completed the demerger of its wholly owned subsidiary Hamelin Gold Limited,
which subsequently was admitted to the Official List of the Australian Securities Exchange. The demerger, approved by
shareholders on 22 October 2021, was completed with a return of capital in the form of an in-specie distribution of 60,000,000
shares in Hamelin Gold Limited to eligible shareholders of the Company on a pro rata basis.
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Notes to the Financial Statements Notional value of shares received on demerger of Hamelin Gold Limited1
Less:
Difference to the fair value of in-specie distribution to Company shareholders2
Net assets of Hamelin Gold Limited at the demerger date
Adjust pre-demerger profit attributable to Hamelin Resources
Costs attributable to the demerger
Gain recognised on Demerger
$
12,000,000
(1,510,187)
(2)
(294,154)
(90,811)
10,104,846
1 Being 60,000,000 ordinary fully paid shares in Hamelin Gold Limited at the Initial Public Offer issue price of $0.20 per share.
2 Notional value less capital reduction amount of $10,489,8133 per ATO Class Ruling 2021/93 published 8 December 2021.
3 The fair value of the in-specie distribution of shares to the Company’s shareholders has been allocated to issued capital and accumulated losses as follows:
Fair value of in-specie distribution attributed to issued capital (Note 19)
Fair value of in-specie distribution attributed to accumulated losses (Note 21)
Fair value of in-specie distribution to Company shareholders
$
8,415,115
2,074,698
10,489,813
The capital reduction allocation has been determined with reference to the respective market values of the Company and
Hamelin Gold Limited at the demerger date. The market value of the Company has been determined using the 5-day closing
volume weighted average price preceding the date of demerger, and the market value of Hamelin Gold Limited determined
using the 5-day closing volume weighted average price following commencement of trading on ASX.
Prior to the demerger the Company undertook an internal restructure within the Group such that Hamelin Resources Pty Ltd,
holding solely the West Tanami Gold Project assets, was acquired by Hamelin Gold Limited in preparation for the proposed
demerger.
As part of the restructure an intercompany loan amounting to $294,171 due from Hamelin Resources Pty Ltd to Encounter
Resources Limited was forgiven.
As at the demerger date of 29 October 2021, the assets and liabilities of the Hamelin Gold Limited group were:
Cash assets
Other receivables
Prepaid Initial Public Offer (IPO) related costs
Capitalised exploration costs
Total Assets
Trade and other payables
Share subscription liability (IPO applications received)
Loan due to Encounter Resources Limited
Total Liabilities
Net Assets
$
7,478,304
30,889
716,155
135,636
8,360,984
(440,248)
(7,478,125)
(442,609)
(8,360,982)
2
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Notes to the Financial Statements Directors’
Declaration
In the opinion of the Directors of Encounter Resources Limited (“the Company”)
(a) the financial statements and notes set out on pages 37 to 71 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the financial position as at 30 June 2023 and of the performance for the year ended on that
date of the Group.
(b) the remuneration disclosures that are contained in the Remuneration Report in the Directors Report comply with Australian
Accounting Standard AASB 124 Related Party Disclosures, The Corporations Act 2001 and the Corporations Regulations
2001.
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
(d) the financial statements comply with International Financial Reporting Standards as set out in Note 1.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive
Officer and Chief Financial Officer for the financial year ended 30 June 2023.
This declaration is made in accordance with a resolution of the Directors.
Signed at Perth this 28th day of September 2023.
W Robinson
Managing Director
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Directors’ Declaration
Independent Audit Report
Crowe Perth
ABN 96 844 819 235
Level 24, Allendale Square
77 St Georges Terrace
Perth WA 6000
PO Box P1213
Perth WA 6844
Australia
Main +61 (8) 9481 1448
Fax +61 (8) 9481 0152
www.crowe.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ENCOUNTER RESOURCES LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Encounter Resources Limited (the Company) and its
subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30
June 2023, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Some of the Crowe personnel involved in preparing this document may be members of a professional scheme approved under Professional
Standards Legislation such that their occupational liability is limited under that Legislation. To the extent that applies, the following disclaimer
applies to them. If you have any questions about the applicability of Professional Standards Legislation Crowe’s personnel involved in preparing
this document, please speak to your Crowe adviser.
Liability limited by a scheme approved under Professional Standards Legislation.
The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership
is external audit, conducted via the Crowe Australasia external audit division and Unison SMSF Audit. All other professional services offered by
Findex Group Limited are conducted by a privately owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Perth, an affiliate of Findex (Aust) Pty Ltd
© 2023 Findex (Aust) Pty Ltd
58
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Independent Audit Report
Independent Auditor’s Report Encounter Resources Limited
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key Audit Matter
How we addressed the Key Audit Matter
Consideration of impairment of capitalised mineral exploration and evaluation expenditure
The Group’s Capitalised Mineral Exploration
and Evaluation Expenditure of $17,783,090 is
a significant asset to the consolidated
financial statements and involved significant
management’s estimate and judgement in the
impairment assessment.
This matter is considered a key audit matter
due to:
•
•
the high degree of judgement applied in
assessing whether impairment indicators
are present; and
the significance of additions to
capitalised expenditure of $4,490,490 in
the current year.
The related accounting policies, critical
accounting estimates and judgements and
disclosures are contained in Note 1(l), Note 3
and Note 14 of the financial report.
Our procedures included, but were not limited to:
•
•
•
•
•
assessed the nature of the capitalised costs
through testing on a sample basis and
assessing whether the nature of the
expenditure met the capitalisation criteria.
conducted discussions with management
regarding the criteria used in their
impairment assessment and ensuring that
this was in line with the requirements of
AASB 6 Exploration for and Evaluation of
Mineral Resources.
corroborated representations made by
management regarding their intentions for
exploration activities in the tenement areas
with evidence of activities carried out
assessed the third party information
supporting the Group’s rights to tenure; and
considered the appropriateness of the
disclosures in Note 1(l), Note 3 and Note 14
to the financial statements in accordance
with the relevant requirements of Australian
Accounting Standards.
Information Other than the Financial Report and the Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s 2023 Annual Report for the year ended 30 June 2023 but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based upon the work we have performed, we conclude that there is material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
© 2023 Findex (Aust) Pty Ltd
www.crowe.com.au
59
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Independent Audit Report
Independent Auditor’s Report Encounter Resources Limited
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards, International Financial
Reporting Standards and the Corporations Act 2001 and for such internal control as the directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the group financial report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
© 2023 Findex (Aust) Pty Ltd
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Independent Audit Report
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Independent Audit ReportIndependent Auditor’s Report Encounter Resources Limited © 2023 Findex (Aust) Pty Ltd www.crowe.com.au 61We communicate with the directors regarding, among other matters, the planned scope and timing ofthe audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Wealsoprovide the directors witha statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters thatmay reasonably bethoughttobear on our independence,and whereapplicable, actions taken to eliminate threats or safeguards applied. From thematters communicatedwith the directors, we determine those matters thatwereofmost significance intheaudit ofthefinancial report of the currentperiod and are therefore the keyaudit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureaboutthe matter or when,in extremely rarecircumstances, we determine that amatter shouldnotbecommunicated in our auditor’sreportbecause the adverse consequences ofdoing sowould reasonably beexpected to outweigh the public interest benefits ofsuch communication. Report onthe Remuneration Report Opiniononthe Remuneration Report We have audited theRemunerationReport included in pages 27 to 33of the directors’ report for the yearended30June2023.Inour opinion,the Remuneration Report of EncounterResources Limited for the year ended 30June 2023, complies withsection 300A oftheCorporations Act 2001. Responsibilities The directors ofthe Company are responsible for the preparation and presentation oftheRemuneration Report in accordance withsection 300Aofthe Corporations Act 2001. Our responsibility isto express an opinion on theRemuneration Report,based onour audit conducted inaccordance withAustralian Auditing Standards. Crowe PerthSuwarti AsmonoPartnerDated at Perththis28thday of September 2023 ASX Additional
Information
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was
applicable as at 2 October 2023.
A. Distribution of Equity Securities
Analysis of numbers of ordinary fully paid shareholders by size of holding:
Distribution
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
More than 100,000
Totals
Number of shareholders
Securities held
% Securities
136
539
418
1,010
379
2,482
46,735
1,628,523
3,366,201
39,856,789
350,627,533
395,525,781
0.01%
0.41%
0.85%
10.08%
88.65%
100.00%
There are 224 shareholders holding less than a marketable parcel of ordinary shares.
B. Substantial Shareholders
An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below:
Shareholder Name
IGO Limited
William Michael Robinson
Silver Lake Resources Limited
Issued Ordinary Shares
Number of shares
% of shares
28,400,572
27,285,889
20,513,397
7.18%
6.90%
5.19%
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ASX Additional Information C. Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are listed below::
Shareholder Name
HSBC Custody Nominees (Australia) Limited
IGO Limited
William Robinson and associates
Silver Lake Resources Limited
UBS Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited – GSCO ECA
Paul Chapman and associates
Precision Opportunities Fund Ltd
Peter Bewick and associates
BNP Paribas Nominees Pty Ltd
Picton Cove Pty Ltd
Citicorp Nominees Pty Ltd
Fifty Second Celebration Pty Ltd
Philip Crutchfield and associates
BNP Paribas Nominees Pty Ltd – HUB24 Custodial Services
Seneschal (WA) Pty Ltd
HS Superannuation Pty Ltd
Wythenshawe Pty Ltd
Kiki Super Fund
Gremar Holdings Pty Ltd
Total
Ordinary Shares - Quoted
Number of shares
% of Shares
33,680,053
28,400,572
27,285,889
20,513,397
15,000,000
14,765,586
10,782,150
10,000,000
9,510,303
7,337,244
5,656,937
4,595,146
4,566,124
4,559,391
4,505,104
4,012,679
2,777,717
2,701,761
2,600,000
2,510,000
8.52%
7.18%
6.90%
5.19%
3.79%
3.73%
2.73%
2.53%
2.40%
1.86%
1.43%
1.16%
1.15%
1.15%
1.14%
1.01%
0.70%
0.68%
0.66%
0.63%
215,760,053
54.55%
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ASX Additional Information D. Unquoted Securities
Options over Unissued Shares
Number of Options
Exercise Price
Expiry Date
Number of Holders
5,050,000
1,500,000
650,000
2,450,000
800,000
3,630,000
1,200,000
1,000,000
1,000,000
3,980,000
250,000
500,000
100,000
500,000
200,000
400,000
400,000
400,000
24,010,000
16.2 cents
8.2 cents
18.2 cents
22.2 cents
21.2 cents
22.4 cents
19.0 cents
20.0 cents
30.0 cents
26.8 cents
28.3 cents
20.8 cents
17.5 cents
50.0 cents
36.8 cents
59.2 cents
67.7 cents
68.9 cents
31 October 2023
30 November 2023
30 June 2024
26 November 2024
30 April 2025
28 November 2025
28 June 2026
29 September 2025
29 September 2025
30 November 2026
15 January 2027
28 February 2027
27 March 2027
29 May 2026
20 June 2027
13 July 2027
24 July 2027
1 August 2027
8
1
3
7
3
10
3
61
61
5
1
2
1
62
2
1
1
1
1
2
Issued to Cannacord Genuity (Australia) Pty Ltd and Chieftain Securities (WA) Pty Ltd for joint lead manager services to the share placement completed on 29
September 2022.
Issued to Cannacord Genuity (Australia) Pty Ltd and Chieftain Securities (WA) Pty Ltd for joint lead manager services to the share placement completed on 29 May 2023.
E. Voting Rights
In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each
member present in person or by proxy shall have one vote and upon a poll, each share will have one vote.
There are no voting rights in respect of options over unissued shares.
F. Restricted Securities
There are no restricted securities.
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ASX Additional Information Corporate
Directory
Directors
Share Registry
Paul Chapman
Non-Executive Chairman
Automic Group
Will Robinson
Managing Director
Address
Peter Bewick
Non-Executive Director
Jonathan Hronsky
Non-Executive Director
Philip Crutchfield
Non-Executive Director
Level 5, 191 St Georges Terrace
Perth, Western Australia 6000
Telephone
1300 288 664
Company Secretaries
Securities Exchange Listing
Kevin Hart
Dan Travers
The Company’s shares are quoted on the Australian
Securities Exchange. The home exchange is Perth,
Western Australia.
Principal and Registered Office
ASX Code
Encounter Resources Limited
ENR – Ordinary shares
Address
Suite 2, 1 Alvan Street
Subiaco, Western Australia 6008
Telephone
(08) 9486 9455
Web
www.enrl.com.au
Auditor
Crowe Perth
Address
Level 24, Allendale Square
77 St Georges Terrace
Perth, Western Australia 6000
Company Information
The Company was incorporated and registered under the
Corporations Act 2001 in Western Australia on 30 June
2004 and became a public company on 26 May 2005.
The Company is domiciled in Australia.
80 E N C O U N T E R R E S O U R C E S L I M I T E D
80 E N C O U N T E R R E S O U R C E S L I M I T E D
82 E N C O U N T E R R E S O U R C E S L I M I T E D
82 E N C O U N T E R R E S O U R C E S L I M I T E D
Suite 2/1 Alvan Street
Subiaco WA 6008
+61 8 9486 9455
contact@enrl.com.au
www.enrl.com.au